Copyright Office Regulates The MLC: Selected Public Comments on the Copyright Office Black Box Study: The DLC Spills the Beans, Part 2

[Continued from Part 1]

The DLC’s comment to the Copyright Office makes it clear that there is a substantial likelihood that the services are holding substantial monies in the black box—substantial amounts of other people’s money.  Probably some—or a lot—of your money.  The comment suggests more strongly and openly than we have seen before that not only are the services holding more money than they intend to acknowledge that they owe, they know they are and they intend to get away with it.  And as our friend Guy Forsyth has written in his classic song Long Long Time, nothing says freedom like getting away with it.

The DLC’s comment makes it clearer than ever that the whole point of Title I was for the services to get away with it under the guise of doing you the huge favor of paying you the money that they already owe you in return for “stakeholders” acting under color of authority to give away the few rights songwriters have.  And we’d bet you didn’t even know it happened.  Yet you are going to be bound by the deal these people made who don’t represent you and had no actual authority to make any deal on your behalf.  The DLC tells us:

This was the heart of the deal struck by the stakeholders in crafting the MMA: to provide legal certainty for DMPs, through a limitation on liability, in exchange for the transfer of accrued royalties. That is a crucial point for the Office to keep in mind as it crafts rules in this space. If the regulations make it less likely that a DMP will be able to rely on that liability protection when it needs iti.e., if it increases the risk that a court would deem a DMP to not have complied with the requirements in section 115(d)(10)—a DMP could make the rational choice to forego the payment of accrued royalties entirely, and save that money to use in defending itself against any infringement suits.

Read that last clause again:  “a DMP could make the rational choice to forego the payment of accrued royalties entirely, and save that money to use in defending itself against any infringement suits.”

The DLC is threatening to use your money to cover the costs of defending itself against lawsuits yet to be filed.  Perhaps that assertion proves too much—if the deal was that the services would use your money to buy themselves a safe harbor, if they don’t pay you the money then they don’t get the safe harbor?

Presumably they would also seek to get their assessment money back from The MLC, too.  Which of course gives them even more leverage now that the Fox is in the henhouse.  Given that The MLC seems to be teetering on the edge of a complete meltdown and seems to exist for the sole purpose of driving signups to HFA, maybe songwriters should be saying, if the DLC threatens to abandon The MLC can we please get that in writing?  They should understand that threatening to withhold money from The MLC is pushing on an open door for most songwriters who are not part of the insider cabal.

It’s pretty obvious from this comment that there’s an imminent danger that the monies owed by the services for the black box are likely to evaporate if something isn’t done to preserve the status quo.  You couldn’t ask for a more clear and compelling reason that the concern is justified.  Plus, what the services complain of is that the Copyright Office’s proposed regulations would make payments more accurate and that they might end up matching more than they already have.

They couldn’t be clearer:

DMPs supported enactment of the MMA fully intending to pay over any accrued royalties still on their books, with the assurance that the limitation on liability the MMA establishes in exchange will protect them from ruinous litigation.

Or said another way, getting caught.  And that’s what they really want to avoid.  One person’s “ruinous litigation” is another person’s justice.  Here they say it yet again:

The Copyright Office has proposed a regulation that requires DMPs to provide a “clear and detailed explanation” of any difference between “the total royalty payable” as reported on the cumulative statement of account (which reflects the royalties for all unmatched usage) and the “royalties actually transferred to the mechanical licensing collective.” We agree with this proposal, with one minor modification: we would suggest changing the phrase “total royalty payable” to “total royalty reported,” to avoid any suggestion that the amount reflected on the cumulative statement of account is necessarily “payable” to the MLC. DLC otherwise agrees with the Office that the MLC is entitled to such an explanation when there are such discrepancies.

The difference between “payable” and “reported” is the difference between what a service in fact owes compared to what they say they owe.  Remember, none of these statements will have been subject to a royalty compliance examination (or “audit”) at the time, if ever, that the money is paid over to The MLC.

Plus, we have absolutely no confidence that The MLC is going to be able to process the trillions of transactions involved which will inevitably lead to a huge black box problem that no one seems to be in a hurry to solve.  So the Copyright Office is exactly right to seek as much clarity as possible on the sums paid over to The MLC.  The balance of hardships tilt’s decidedly in the favor of songwriters.

As the House Judiciary Committee stated:

Testimony provided by Jim Griffin at the June 10, 2014 Committee hearing highlighted the need for more robust metadata to accompany the payment and distribution of music royalties….In an era in which Americans can buy millions of products via an app on their phone based upon the UPC code on the product, the failure of the music industry to develop and maintain a master database has led to significant litigation and underpaid royalties for decades. The Committee believes that this must end so that all artists are paid for their creations and that so-called ‘‘black box’’ revenue is not a drain on the success of the entire industry.

It’s obvious now that the only way to save the black box from total collapse is to have the services disclose immediately how much they are holding and for which songs, artist name and track name if nothing else.  There’s a real danger in not doing that—and the DLC is telling us clearly what their intentions are in a conclusive statement that raises serious questions.

 

 

 

Copyright Office Regulates The MLC: Selected Public Comments on the Copyright Office Black Box Study: The DLC Spills the Beans, Part I

We once had a mechanical licensing system in the U.S. that worked well enough for songwriters for 100 years.  The problem with the mechanical licensing system wasn’t so much the licensing function it was the royalty rate.  The government held down songwriters for 70 years to a 1909-based royalty rate that for some reason was frozen in time (more on frozen mechanicals here).  But if users failed to license, songwriters could at least sue for statutory damages.

After the Music Modernization Act passed in 2018, they managed to even give away songwriters’ rights to sue.  The songwriter part of the three-part MMA is called “Title I” and that’s the part that gave away the one hammer that songwriters had to be heard when their rights were infringed.  They called it the “limitation on liability” and it was retroactive to January 1, 2018—before the bill was actually passed by Congress and signed into law.

It’s entirely possible that even if you knew about the MMA, you didn’t know about this new safe harbor created by the same uber-rich companies that wrote themselves the DMCA safe harbor that has created the value gap and plagued artists for years and the “Section 230” safe harbor in the “Communications Decency Act” that services use to profit from human trafficking and revenge porn stalkers.  And now there’s the MMA safe harbor.

Only a handful of insiders got to be at the table when they gave away your rights in Title I without your even knowing what they were up to.  Don’t get us wrong, there are great things in the other parts of MMA dealing with closing the pre-72 loophole, some important changes to the rules for ASCAP and BMI with rate courts, and the fix for producers getting a fair share of SoundExchange royalties.  These are all good things.

The part that sucks is Title I that created this new safe harbor give away that will bedevil songwriters for generations to come.

So you may be asking how do we know this?  Since the so-called “negotiations” for the Title I give away happened behind closed doors, how do we even know what happened?  The answer is that we didn’t have the proof because anyone who tried to offer constructive criticism to the “negotiators” for songwriters was menaced, threatened and stabbed in the back.  Nobody was talking about the safe harbor give away.

But now we do have the proof courtesy of the music services representative at the “Digital Licensee Coordinator” who opened the kimono in their recent comments to the Copyright Office about the black box.  (Read the entire DLC comment here.)  Their comments make for quite a read, not only about the so-called “negotiations” by the unrepresentatives of songwriters but also about the run-up to the MMA in the private settlements that nobody sees.

The first issue is that the Copyright Office has proposed some well-meaning regulations to increase the likelihood that the black box will actually get paid to the songwriters who earned the money.  The services seem to be all in a huff about rules applying retroactively when they’ve been using old rules to organize their data.  You know, they don’t like this retroactive thing unless it’s a retroactive expansion of their safe harbor.  Then they like it just fine.

“The DLC emphatically opposes the Office’s proposal to retroactively expand the required reporting of sound recording and musical work information beyond that which is required by the existing regulations in 37 C.F.R. § 210.20. Those regulations were issued in interim form in December 2018, and finalized in March 2019, and unambiguously required collection of reporting information under the existing monthly statement of account regulations in 37 C.F.R. § 210.16. The Office has now proposed, in paragraph (e) of the proposed rule, to change the required reporting elements for the individual tracks, nearly two years after the MMA’s enactment and months before cumulative statements of account are due to be served.”

Sorry, but we think that the richest companies in commercial history, with trillions and trillions of dollars in market capitalization and the most advanced data mining capability in the known universe, can manage to figure out how to pay songwriters in a way that will actually result in songwriters getting paid. The truth is that they are so used to screwing songwriters that they are not going to lift a finger to help beyond the absolute minimum they have to do.

They got their retroactive safe harbor to give away, so don’t come whinging about retroactivity if it makes the distributions more likely to get to the right person, something the services have uniformly failed to do from their founding.

But now it gets interesting.

“It is well-known that—prior to enactment of the MMA—a number of DMPs entered into industry-wide royalty distribution agreements under the auspices of the NMPA, structured to allow all unmatched works to be claimed by their owners and all accrued royalties to be paid out, in what became the model for the MMA. These agreements were designed to, and did, put tens of millions of dollars in statutory royalties in the hands of copyright owners—money that they had been unable to access due to the broken pre-MMA statutory royalty system.”

First of all—“money that they had been unable to access due to the broken pre-MMA statutory royalty system” is utter crap.  The reason that services didn’t pay out is because they didn’t clear the songs but exploited them anyway.  For example, that’s also why Spotify got sued so many times and is still getting sued.  It’s not that the system was broken, it’s that the services didn’t care and handled licensing in an incompetent manner. In case you missed it, that’s what they want to keep doing by extending into the future the same sloppy practices they got sued for in the past.  The only thing new and improved about it is their absurd and undeserved safe harbor.

We don’t know what these “industry-wide royalty distribution agreements” were all about, but one thing we know for sure is that they weren’t “industry-wide” and the NMPA wouldn’t have had the authority to make those deals “industry-wide” in the first place.  “Industry-wide” seems to mean “with the major publishers” or with NMPA members or just plain insiders.  The implication is that “industry-wide” means everyone, which it clearly does not and cannot if you think about it for 30 seconds.

And if the copyright owners were owed a payment with their own money, the only reason that they couldn’t “access” the funds is that the services wouldn’t let them.  When you owe somebody money, you should pay them because you owe them, not act like you’re doing them a favor.

But here it comes:

Congress in the MMA’s limitation on liability provision enacted a compromise among stakeholders’ interests: elimination of the uncertainty of litigation facing DMPs in exchange for the transfer of accrued royalties to the MLC.

In other words, the services sat on the money and refused to pay until they got the MMA safe harbor.  That was the “trade”—do something the services were already required to do in return for something the songwriters were never obligated to do.  The songwriters paid for the safe harbor with their own money.

“As set forth in the relevant statutory provision, in exchange for payment of accrued royalties from “unmatched” usage prior to license availability date (and related reporting), DMPs are protected from the full brunt of copyright damages in any infringement lawsuits based on alleged failures to comply with the requirements of the prior mechanical licensing regime. The provision provides a clean slate for any past failures under the prior licensing regime for those DMPs who pay those back royalties and provide associated reporting. It provides requirements for DMPs that seek to take advantage of the limitation on liability, ensuring that DMPs that pay accrued royalties to the MLC can do so without having to second-guess whether the payment was worth it—that is, whether they qualify for the limitation.

This was the heart of the deal struck by the stakeholders in crafting the MMA: to provide legal certainty for DMPs, through a limitation on liability, in exchange for the transfer of accrued royalties.

Which “stakeholders” were these?  Did they include any of the plaintiffs who were then suing the services?  No.  Did they include anyone who didn’t drink the Kool-Aid?  No.

So let’s be clear—the reason that the services deigned to actually pay money they owed for failing to license properly is because they didn’t want to be sued for screwing up.  They wanted a vig of a new safe harbor, and as the DLC tells us very, very clearly this issue was at the core of the deal you didn’t make for Title I.

More in Part II

 

 

 

 

Must Read by @superwuster: A TikTok Ban Is Overdue

[Professor Tim Wu has a must read post in the New York Times that nails the problems with TikTok (and WeChat).  The subtitle are words that will live forever:  “Critics say we shouldn’t abandon the ideal of an open internet. But there is such a thing as being a sucker.”  Wowsa.]

Were almost any country other than China involved, Mr. Trump’s demands would be indefensible. But the threatened bans on TikTok and WeChat, whatever their motivations, can also be seen as an overdue response, a tit for tat, in a long battle for the soul of the internet.

In China, the foreign equivalents of TikTok and WeChat — video and messaging apps such as YouTube and WhatsApp — have been banned for years. The country’s extensive blocking, censorship and surveillance violate just about every principle of internet openness and decency. China keeps a closed and censorial internet economy at home while its products enjoy full access to open markets abroad.

The asymmetry is unfair and ought no longer be tolerated.

Read the post on the New York Times.

Open Letter to Jeff Bezos from Trixi the Three Legged Rescue Dog

Todays guest opinion is by Trixi a 5 year old female Pit Bull/American Bulldog mix and cancer survivor.

Hi Jeff

You don’t know who I am, but I’m pretty familiar with who you are.  You are the guy that sends those men and women up onto my front porch. This happens nearly every day. I’m not sure what it is I ever did to you but it is quite annoying. The newspapers that line the floor around the cat’s litter box (yes, I know I have a problem) also tell me you are the richest man in the world with a net worth of 188 billion dollars. I understand that your company has benefitted enormously from the current pandemic.  Those same newspapers report you and your fellow tech titans Zuckerberg and Musk have seen your net worth rise $115 billion just this year.  It is a good year to be a tech titan.

In contrast to that the family I live with is largely supported by money earned from performing music.  Concert musicians and concert promotion is the family business.  Since mid march there has been no concert income for my family. In fact our family income has fallen 80%.  Fortunately for me and my family we still receive songwriting royalties from streaming and sales. These royalties are from songs my dog dad wrote over the last 40 years.  My understanding is my family uses these royalties as a kind of rainy day fund that helps us get through tough times and the dry periods between albums and tours.

To be clear I’m not whinging here. I have it pretty good for a dog. I spent much of my first few years in kennels having puppies. I know how fortunate I was to be adopted by my family.  But back in the spring I developed a dull pain in my left front shoulder.  At first I thought it was a muscle injury from trying to scoot under the couch to get what I thought was an old dried up bit of bacon. Long story it wasn’t. It was pretty good. But it wasn’t bacon. Anyway,  the pain rapidly worsened until I couldn’t eat or even drink water.  I tried to crawl under the house to die. It was that bad.  The vet told us I had a malignant bone tumor.  I would need my left front leg amputated at the shoulder and a few rounds of chemo.  Fortunately the surgery and chemo appear to have been successful. Knock on wood.  It took me about a week to figure out how to walk. Now I get around pretty good. Here’s a little secret dogs: It’s easier to run than walk with three legs.

The point is without those songwriter royalties I don’t know if my family would have had the cash to pay for that surgery and treatment.  Well maybe that’s not quite true as I’m certain my family would have done anything they could to save me.  Put the surgery on credit cards or even taken out a loan.  But you get my point.  My life is an expense that many music families might not be able to afford.

Now the other day I was in the recycling bin checking to see if all the cans were properly washed out and I came across the full docket for the United States Court of Appeals Washington DC Case No. 19-1028.  Fascinating.  Basically you, Jeff Bezos, the richest man in the world sued the Copyright Royalty Board to “recalculate” songwriter royalties retroactively 2018-2022. And you won! Now the trade organization that represents you is claiming this is simply a technical detail. But that is not true. it is clear from the actual court filings that you (and your buddies Spotify and Google) want to retroactively reduce songwriter royalties from the current 13.3% downward to around 10.4%.  That is, a retroactive 28% pay cut to my family. There is a very real possibility of negative songwriter royalty checks in late 2020 or early 2021.  This is during a worldwide financial crisis. When my family has already lost 80% of their income.

So I just have one question for you Jeff.

“How much more fucking money do you need?  What kind of asshole sues to retroactively take pay from songwriters during a pandemic?”

Okay that’s two questions. I’m a dog. I’m not good at math.  I am good at empathy.  You should learn.

You can read the court opinion at link below.

2020-08-11 Case No. 19-1028 GJ v LOC UNSEALED OPINION FINAL

My Complaint to FTC Over Spotify False Claims They Weren’t Suing to Lower Songwriter Royalties

Spotify is completely full of shit (as usual). Spotify for Artists webpage the day after they argued in federal court to lower songwriter royalty rates.

Spotify’s claim that they are not suing to lower songwriter royalty rates appears to be a form of False Advertising, that may give them a competitive advantage over competitors.  For this reason I filed a complaint with the FTC.  Below.

On March 11th 2020 Spotify through its Spotify for Artists webpage made false claims about the nature of its appeal of songwriter royalty rates. (https://artists.spotify.com/blog/you-might-have-heard-about-the-streaming-industry%27s-crb-appeal-here%27s-what ). They also made these claims in a circulated press release on or around March 11th 2020. Specifically, they imply they were not trying to lower songwriter rates. The United States Court of Appeals For the District of Columbia ruling on their appeal (USCA Case #19-1028 Document #1856124 Filed:08/11/2020 Argued 10th of March) clearly indicates this is not the case. Further, Spotify apparently manufactured out of whole cloth the story that their appeal was centered on a technical matter of “bundling” lyric and video rights. On the webpage cited Spotify says “A key area of focus in our appeal will be the fact that the CRB’s decision makes it very difficult for music services to offer ‘bundles’ of music and non-music offerings.” The Appeals Court ruling nor the rest of the docket appear to support this contention. It appears the intention of this statement was to create the false impression that the goal of the appeal was not to lower songwriter rates, thus making consumers think Spotify was not taking a hard line towards songwriter pay. Consumers may have been misled and purchased Spotify subscription over competitors (like Apple) because they thought Spotify was not deeply hostile to pay raise for songwriters (Apple did not appeal songwriter royalties.) Finally, Spotify argued complaint March 10th 2020. The company had to know the March 11th statement was false.

If you want to file your own complaint go here

https://www.ftccomplaintassistant.gov/GettingStarted?NextQID=409&Url=%23%26panel1-9&SubCategoryID=17#crnt

Just use the “other complaint” form.  Let them sort it out.

Use this address for Spotify.

Spotify USA Inc.
4 World Trade Center, 150 Greenwich Street, 62nd Floor, New York, NY 10007
USA

I would use Horacio Gutierrez Head of Global Affairs & Chief Legal Officer at Spotify as the contact responsible for the false claim on FTC form.

United States Court of Appeals DC ruling on Mechanical Royalties Unsealed

Here is the ruling. Unsealed.  I just read it and I’ll tell you this, although it is a technical ruling in many ways, it clearly goes against songwriters.  There is little chance this will not lower your royalty rates in the subsequent rehearing.

First, The Court of Appeals all but directs the CRB to put the cap back on “total content costs.” This clearly will have a depressive effect on the alternate mechanical royalty calculation.  Second, the court seems to be fundamentally uncomfortable with the fact that songwriters get a (phased in over 5 years) 40% raise. Like everyone involved in the proceedings so far, no one seems to understand the initial rate was arbitrary. It was picked out of thin air when no one knew what streaming meant.  Finally it’s totally depressing to see a federal court reiterate the notion that the federal government can not put a streaming service out of business by raising songwriter rates too high.  It’s not the governments job to save companies that have bad business models.  If the streaming services can’t pay fair rates to songwriters perhaps they should charge their customers more, not pay songwriters less.  Why do the federal courts think songwriters have to subsidize the streaming business?  All in all a depressing read.  The system is broken.  Songwriters who every day add value to the GDP of this country are robbed and brutalized by their own government. A distant unaccountable unelected elite that has no concept of our lives.  Meanwhile they make Daniel Ek billions of dollars richer every year.  Does that seem right to you?

 

2020-08-11 Case No. 19-1028 GJ v LOC UNSEALED OPINION FINAL

Not the Onion: Spotify Claims it is Suing to Raise Songwriter Royalty Rates

 

Look! It says so in this blog post! Spotify says it is “supportive” of the 15% effective royalty rate to songwriters but it just wants you to throw in  a bunch of other rights for which you are already paid a separate fee.  See? That’s cool right?  That’s not a pay cut.  The appeal of the Copyright Royalty Board rate-setting is actually done to help songwriters!

I mean you can kind of sort of maybe say they are reducing your pay because yes that separate income you get from micro sync and lyric display will be deducted from the 15% effective rate.  But no they aren’t trying to lower your mechanical royalty rate, they are just trying to take away other streams of revenue that you already have.  I suppose you can say technically they are slashing your pay. While technically correct that would be silly!

I know it’s a little confusing cause by law the Copyright Royalty Board was charged with only setting the streaming mechanical  rate in this proceeding. But hey, these are extraordinary times, its okay if the CRB just goes ahead without any constitutional authority and effectively ex-post facto eliminates royalties paid under a different private contract. Sure that’s technically unconstitutional and administrative judges don’t enjoy the same immunity from liability that other judges enjoy, but yeah why not?   In times of extraordinary hardship, if streaming services have to wield the awesome power of the federal government to hurt the little guy, so be it. I mean you have to starve a few million peasants to make a crony capitalist omelette right?   What’s a 20-30% pay cut to help a billionaires get by?

 

Negative Royalty Checks: Streaming Service Appeal Makes it Real Possibility

Billboard has reported that streaming services have won their appeal to force the Copyright Royalty Board to recalculate songwriter streaming royalties for 2018-2022. Yes, that means retroactively calculate 2 1/2 years of royalties.  This could easily lead to songwriters getting reduced or negative royalty checks.

Here is how:

In 2017 the royalty rate per stream for songwriters was calculated by dividing 10.4% of gross streaming service revenue by the total number of streams.  In 2020 it is calculated using 13.3% of gross streaming service revenue by the total number of streams.  If streaming services like YouTube and Spotify get their way that 13.3% will be reduced dramatically.  Let’s say streaming services manage to get the Copyright Royalty Board judges to reduce it retroactively to 10.4%.  Spotify and  YouTube would back out the overpayment from songwriters future royalty checks.  Remember Spotify has already done this once when they claimed they overpaid on family subscriptions.

Example: suppose you earned exactly $1000 per quarter over the last 2 1/2 years, or $10,000.  Streaming services could contend that they “overpaid” you 28% each quarter.  They would be within their rights to back out $2,800 from your next checks.  Negative royalty checks. Expect that in late 2020 or early 2021 just when your BMI royalties will shrink from the pandemic induced collapse in local advertising.

Now various industry and trade operatives are trying to spin this ruling as just a technical setback. That the Copyright Royalty Board used a flawed process to calculate songwriter royalty rates. The recalculation is no big deal. They would have you believe that streaming services spent millions of dollars on a federal appeal to get the same rate, to pay songwriters the same amount of money.  Does that make any sense to you?  Do not be fooled by this exercise in covering their ass.  It is unlikely that songwriters rates will remain the same.   The purpose of the exercise is to get lower rates and these lower rates will come retroactively out of your checks.

You have to wonder what kind of people work at these streaming services.  What kind of person is fully on board with a corporate policy to claw back pay from workers, when those workers have already lost most of their live music income.  I urge anyone that knows employees of these three companies (Google, Amazon and Spotify) to publicly out/shame these individuals. Force them to denounce their companies regressive and inhuman policies. Shun them from polite society.  Further any artists still cooperating with the digital services like Spotify, Amazon and YouTube should be regarded as strikebreakers and scabs. These artists should be treated accordingly.  Artists should pull new releases from streaming services that are pursuing this policy.

This is war.

Good data in Garbage Out: The MLC/HFA Data Disaster

 

As many of you already know the new federal Music Licensing Collective has selected Harry Fox Agency as the vendor to provide song data to the MLC. It is rapidly becoming clear that what this really means is that the MLC will start with the HFA song database and then through a rather convoluted and manual process, songwriters will be required to “ensure the quality of that data” if they expect to get paid. In other words songwriters will do all the heavy lifting.

I’m a little confused here.  The MLC received $37 million dollars in startup costs from digital music services.  Clearly an accurate database is necessary to start up an entity designed to distribute song royalties.  So it should be a start up cost, not an after thought outsourced to songwriters. Especially after we songwriters were told over and over again that the streaming services would pay for MLC.

As an aside,  we will never know much about what the MLC spends its money on  because the whole fucking budget of the MLC has been redacted on the copyright office website.  This is not a joke.  How is this even legal?  Why the fuck is the budget secret from the songwriters/public it’s supposed to serve? You think the so-called songwriter groups represented on the various boards of the MLC would be the least bit embarrassed by this.  Apparently they aren’t.

Figure 1.  MLC filing on Copyright Office website.  The entire budget is redacted in the public record. 

But I digress. That’s another blog. The much bigger problem is the MLC is apparently building the database around the existing HFA database.  You know the database that got Spotify and Rhapsody sued.  This will be the MLC database. Garbage in Garbage out. This will be an unmitigated disaster.  Let me show you:

In 2019 I chose HFA to administer the mechanicals on the self-published part of my catalog.   When my team first contacted HFA they were told HFA had information for around 80 of my songs already.  Unfortunately the data was wrong.  It showed me as 100% writer on many songs that were co-written and co-published. Interesting cause at that point I’d  never been paid by HFA. And I am not sure where this information came from as at that point I had never given any splits to HFA.  I suspect ass covering because the Spotify/Rhapsody lawsuits involved this part of my catalog (HFA was vendor hired by Spotify to clear songwriter licenses and pay songwriters. They failed and the lawsuits were the result.)

Regardless my team proceeded to update the data and provided the proper splits and co-publishers to HFA.   And this is where it gets weird. We received this email from HFA.  Here is a snippet.

“For updating songs it is most efficient to process them manually, by entering specific song codes in the “Add/Update Song” section of the eSong tool. Additionally, you cannot relinquish or decrease your splits on songs in our system, as this requires an agent to do it on your behalf. I say this because it appears you have a 100% split on nearly all songs in your catalog. (Emphasis added.)

The wording is a little unclear.  But I thought that this meant I could “decrease” my share on specific songs, and have the co-writers co-publishers attributed if I went through the manual process.  So we sent a list with updated songs splits,ISWC (unique international identifier for a composition) and IPI numbers (unique international identifier for a songwriter or publisher).

I didn’t think any more of this until I had my team build a CWR file.  CWR is the most widely used international data format for song information (The MLC is not using this format for some reason).  When we created the CWR file we discovered that the HFA publisher data still did not match. Not only that it seemed to be missing important data (ISWC, IPI and ISRC) that we had provided.

Here is an example song:

Our Data (submitted in 2019 based on BMI records):

 

Resulting HFA data (2020 public facing database):

First thing we notice is that HFA is reporting that I am not an HFA registered publisher. WTF? Second problem is that Trent Summar’s publishing share (Farm Rock Music) is not listed. This has instead been assigned to “copyright control.”  It is unclear what that means. It is clear that since this song was previously mis-registered as David Lowery/Bicycle Spanaird 100%, HFA records have been updated. The co-writer has been added, but not the co-publisher. But curiously they somehow have Trent’s middle name. Now I thought perhaps this was just a deficiency in the public facing database.  So I double checked by looking up the song from my own HFA account.

Here is the (internal data) that search returned.

No IPI numbers? Well maybe those are hidden for privacy. But no ISWC number? And Farm Rock Music is still not listed as a publisher.  That is again listed as copyright control. This is really shoddy work. How is the MLC supposed to distribute royalties based on this data?

I checked an additional 25 co-written songs and the data was fucked on all of them: multiple song codes, incorrect splits, missing co-publisher information, missing ISWC codes, and some songs were just not in the HFA database.  Honestly it looks like someone never finished doing the job.

It’s possible that I or someone on my team somehow screwed this up, but it seems unlikely. I have copies of the HFA formatted excel sheets that were submitted and they are correct.  If all the self-published songwriters are in the same situation then we are likely talking about millions of songs that have bad data. This is very troubling.

“But my BMI Data is Correct.  Why Didn’t MLC Start With That Data?”

Really odd, right? The data the MLC is seeking already exists in a machine readable format at the PROs (BMI, ASCAP, SESAC etc).  Why is it that songwriters can’t simply opt in to have their data transmitted to the MLC? Wouldn’t this be the easiest way to correct the MLC database?  Instead songwriters are going to have to go through and get HFA to manually update each song.  For an average songwriter like myself, even at minimum wage that’s probably several hundred dollars worth of work. And my data is pretty organized!

The sad thing is we were told over and over again that streaming services were supposed to pay for costs of the MLC.  Why are songwriters being asked to do all this unnecessary work? Even the MLC’s official title they’ve given to the effort make songwriters clean up their mess is insulting: “Play Your Part™.”  They thought it so clever apparently they have trademarked the phrase.

The US Copyright Office should step in and look at whats happening with the MLC database.  Something is very wrong with the HFA data.

 

 

 

 

 

 

Copyright Office Regulates The MLC: Selected Public Comments on the Copyright Office Black Box Study: @SoundExchange

[The Copyright Office is asking for public comments on best practices for dealing with the black box as part of the “Unclaimed Royalties Study” mandated by the Music Modernization Act.  We are posting comments or excerpts from comments that we found interesting.  You can find other the posted comments here.

This post is from SoundExchange’s filing.  I have to say that I have long been impressed by SoundExchange’s problem-solving abilities and commitment to get artists paid. SoundExchange sets the standard that The MLC will be measured by and should try to live up to.  Unfortunately, The MLC’s selection of HFA as their data vendor immediately means The MLC is unlikely to have a functioning much less accurate database by the January deadline.  They should really pay attention to SoundExchange’s example.]

Core strategies

Through its experience, SoundExchange has identified and embraced certain core
strategies for administering a blanket license that have had the direct effect of minimizing the incidence of unclaimed royalties. First, a collective must act with a total commitment to transparency and accountability.

Second, to the extent possible, a collective must build systems and practices around standard unique identifiers, which are the best way to manage the huge volume of usage and repertoire data that a collective receives in the digital age.

Third, in building its systems and practices, a collective should rigorously distinguish between repertoire data and usage reporting data, and base the repertoire database on data from authoritative sources, typically rights owners. Fourth, it is essential for a collective administering a statutory license to prioritize education and outreach to those who will receive royalties under the blanket license because the collective represents all payees, not just those who have the sophistication or knowledge to register with the collective in the first place. While no system will ever be perfect, a collective that embraces and implements these core strategies will be best positioned to minimize unclaimed royalties. We address each in more detail below.

A. Commit to transparency and accountability

As a collective, it is critical for SoundExchange to commit to transparency and
accountability. We must be responsive to our stakeholders – the people we pay, who have
entrusted us to collect a critical component of their income. As a baseline, a collective must be governed by those it pays. As a next level, a collective must provide tools to stakeholders that give them transparency into how their royalties are collected and distributed, and a means for providing feedback on the metadata associated with their works.

SoundExchange has adopted a policy and practice of continuous improvement. Most
recently, SoundExchange has rolled out new features in SoundExchange Direct, our online account management portal that allows recording artists and rights owners to navigate their digital performance rights and royalties. SoundExchange Direct allows users to manage multiple SoundExchange accounts and add guest users, update account information including contact and payment or banking information, view payment history and revenue data by top recordings and top services and, most relevant here, upload and manage their repertoire data.

[Read the full post here.]