Poker the Bear: The Sad Unraveling of Lawrence Lessig

Harvard Professor and author of copyright skeptical tomes like “In Defense of Piracy” and “Free Culture” defends himself from accusations of shillery. Lowery digs deep and discovers there is a lot more to this story than meets the eye. 

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This story is of particular importance to artists because Google’s support of ad supported piracy (MegaUpload) and YouTube’s “whac-a-mole” takedown policy have been a financial disaster for artists.  Much of the the intellectual arguments (some would say propaganda) in defense of Google’s practices arise from the work Lessig has done at Harvard, Stanford’s Center for Internet and Society and Creative Commons. Whether artists know it or not Lawrence Lessig has shaped, if not defined the debate over artists rights and the internet.

Lawrence Lessig has posted a long Medium post defending himself against claims made by Jonathan Taplin (and others myself included) that he has effectively acted as a “shill” for Google and other Silicon Valley interests. Don’t get me wrong, I think it is great that Lessig has finally responded to accusations that his research, litigation and advocacy seems to benefit Google while at the same time the institutions with which Lessig is associated receive substantial money from Google and other Silicon Valley interests. The world is a complicated place. No one can ever avoid every appearance of impropriety.  And to be clear I am not accusing Lessig of actual impropriety. The problem is Lessig has not been forthright (as I shall demonstrate) in his answers. Lessig is less than candid about the breadth of the funding,  and continually downplays the importance of his work to Google and others who exploit artists. But most importantly by defensively denying that there is even an appearance of impropriety, he raises more questions than he answers. The   esteemed professor, his work, his finances and foundations deserves a thorough examination.

First let’s consider the enormous amount of Google funding which seems to surround Lessig and associated institutions like a cloud of stale cigar smoke.

The list of institutions with which Lessig has been formally associated is too long to reproduce here. So lets just look at the most prominent. All of the following are tied to Google in three ways:Google funding; Support of Google in amicus briefs/litigation; and other public support of Google policy priorities including op-eds, academic papers or other public statements.

Center for Internet and Society Stanford University
Electronic Frontier Foundation
Public Knowledge
Creative Commons/iCommons
Free Press (Perhaps most notable for it’s praise of Hugo Chavez’s press restrictions)

Lessig lately has fancied himself a political operative. And as a result two other notable Lessig related enterprises have received heavy Silicon Valley funding including Google.

MayDay SuperPac
Lessig for President 2016

(Yes he ran for President of the United States.  But let’s leave all of that for a later post.)

The reason so many of us involved in advocating for the rights of artists find it hard to believe that Lessig is impartial is precisely because of his numerous ties to Google funded institutions.  It strains credibility for Lessig to maintain he is an impartial player when it comes to copyright issues that impact the bottom line of Google and other Silicon Valley companies. For these companies, their employees and shareholders have long been benefactors of institutions with which Lessig is associated. This is a well established pattern going back nearly two decades. Despite his claims to the contrary there is scant evidence he has ever opposed Google on any substantive issue.

Let’s start with the Stanford Center for Internet and Society

You can tell Lessig is now sweating the partnership between Google and CIS because of the logical gymnastics he engages to maintain the idea he did not benefit financially from this relationship.

From his recent blogpost:

“I have never worked for Google. I have never been paid by Google. I got my job at Stanford before Google was giving money to anyone. My job at Stanford did not include the obligation of raising money for anything. The Dean at the time, Kathleen Sullivan, allowed me to found the Stanford Center for Internet and Society, and agreed to fund it and its work while I was at Stanford. Google became a funder of Stanford to support the work of the Center after that. That was not my doing (again, I didn’t raise money at Stanford), that didn’t benefit me (my salary and the Center’s budget was set and independent of law school fundraising), and it didn’t stop me from doing lots of work that really pissed off Google (see, e.g., “For the Love of Culture”). Google didn’t fund my work at Harvard. It doesn’t fund anything I work on now. And yes, Google has taken policy positions consistent with my own, but most of the important positions were ones I took long before there was a Google policy shop.”

Now let’s look at the announcement from Stanford at the time:

https://web.archive.org/web/20180520181855/https://law.stanford.edu/press/google-inc-pledges-2m-to-stanford-law-school-center-for-internet-and-society/

Stanford Law School today announced that Google Inc. has pledged to contribute $2M to help fund the Center for Internet and Society (CIS) at the law school. The Center, founded in 2000 and located in the heart of Silicon Valley, is a public interest technology law and policy program focused on emerging technologies and the law. The collaboration of Google and CIS seeks to establish a balance between the right to access and use information and the ownership of information.

“This is an ideal partnership,” said Larry Kramer, Richard E. Lang Professor of Law and Dean. “One that stands to benefit not just our two institutions but also the world around us. The work done at CIS, exploring how to enhance availability of knowledge and information while supporting its producers and owners, addresses one of the most important questions of our time. And Google is unique in private industry for the depth of its commitment to finding fair and workable solutions to this same question.”

“This support from Google will be critical to achieving a healthy balance between copyright protection and creative license. We will use this support to build a network of legal resources to achieve in practice the balance that copyright law and the First Amendment intend,” stated Lawrence Lessig, Founder and Director of the Center for Internet and Society, Director of the Fair Use Project and the C. Wendell and Edith M. Carlsmith Professor of Law.

This seems to tell a different story. Lessig seems to clearly understand what he was expected to do with this corporate support. Read between the lines: he is to equivocate in a manner that moves the perceived center of the debate towards Google. This is some real “merchants of doubt” shit.  For those of you not in the copyright policy world, all creators know what a “healthy balance” between copyright protections and first amendment issues really means:  The “right” of commercial third parties like YouTube to profit from infringing content while hiding behind their “users.”  It is at this crucial moment in 2006 we begin the horror of whac-a-mole copyright infringement takedown abuse by YouTube. Songwriters and other creators have not been impoverished by digital disruption rather it is this questionable legal maneuver by Google (and a ideologically compliant 9th circuit) that has created the massive market failure for music in the digital marketplace.  Lessig and CIS were right there from the very beginning to support YouTube.

Shortly after this funding event,  Lessig fully engages in a very public fight on behalf of YouTube without ever disclosing any Google funding.  As Robert Levine writes in Free Ride(2011):

Five days after Viacom filed its suit [Against YouTube/Google], the law professor Lawrence Lessig argued in the opinion pages of the New York Times that Viacom was trying to get a court to overturn the Digital Millennium Copyright Act and darkly warned that such a decision would stifle innovation.”The internet will now face years of uncertainty before this fundamental question about the decade-old legislative deal gets resolved,” Lessig wrote, in an essay that mostly took YouTube’s point of view.  He neglected to mention that Google which had just bought YouTube, had recently given $2 million to the Stanford Center for Internet and Society, which Lessig founded and ran when the donation was paid.

Levine continues:

Google announced its gift to the Stanford center on November 28, 2006, two weeks after closing its deal to buy YouTube. (Lessig says he didn’t disclose the donation since the money didn’t directly benefit him and he had no role in raising money at Stanford.) The company knew its acquisition of the video-sharing site could draw litigation: it set aside $200 million to deal with lawsuits.  But Google also apparently wanted some academic firepower on its side.  Although the center’s policy allows only unrestricted gifts that can be used for any purpose, it announced that Google’s donation would be used to “establish a balance between the right to access and use information and the ownership of information”-presumably by the center’s Fair Use Project [Lessig]. While the center says it “avoids litigation” involving Google, much of its work involves challenging copyright laws in ways that would benefit the company.  Further this in turn could help Stanford: John Hennessy, the dean, serves on Google’s board of directors, and the company has given stock to the university.

Now it’s helpful to take a pause here and note that Lessig is the former director of the Edmond J. Safra Center for Ethics at Harvard University 2009-2015.  That’s right the “ethics professor” was carefully parsing his language to Levine when he denied he should have disclosed the financial ties in his op-ed. Most people would regard this as unethical. But this is par for the course for Lessig. It is built into his ethical DNA. Lessig has constructed a very unique view of his ethical responsibilities as an academic and lawyer.  It’s certainly more contorted and restricted than what most individuals would view as their ethical responsibilities. You be the judge. He helpfully provides a detailed overview in the disclosure statement on his personal website:

It begins:

The simple version is just this:

I do not shill for anyone.
The more precise version is this:
I never promote as policy a position that I have been paid to advise about, consult upon, or write about.
If payment is made to an institution in a way that might fairly and reasonably be said to benefit me indirectly, then I will either follow the same rule, or disclose the payment.

The precise version need to be precisely specified, but much can be understood from its motivation: “Corruption” in my view is the subtle pressure to take views or positions because of the financial reward they will bring you. “Subtle” in the sense that one’s often not even aware of the influence. (This is true, I think, of most politicians.) The rule is thus designed to avoid even that subtle force.

Lessig would seem to continually violate his own rules.  The problem is that Lessig doesn’t see it that way and thus follows the above simple statement with a series of definitions, delimitations and exceptions that seem to eviscerate the above paragraph. As well as any normal understanding of ethics.  For example:

“that I have been paid “: “Paid” means directly or indirectly. “Directly” would be direct compensation to me, or support for my research, or other funding I otherwise wouldn’t have been entitled to.

“Indirectly” means compensation to an entity that I am responsible to raise money for from an easily identified interest. This line is hard to draw in many cases, but relatively easy to draw as it applies to me: I am not hired to fundraise for my law school. Thus, if you give a substantial amount of money to Harvard, you don’t, in my view, indirectly benefit me — because you have not made my life any different from how it was before you gave that money. (Indeed, given the hassle that usually runs with such gifts, you’ve likely made my life more difficult.) [emphasis added]

First, Lessig is relying on a dodgy loophole of his own creation to avoid violating his own rules. In his own words, just because he isn’t “responsible” for asking donors for money, a donor like Google can give money to an institution for which he works, and by his carefully delimited definition he doesn’t directly or indirectly benefit?  See how that works? Also “easily identified interest?”  What is the point of that exception?  One could read that as an advertisement to wash money through third parties.  Right?

Second, Lessig is surely smart enough to understand that money is by definition fungible. A donation that can only be used for staff, building, travel and events, frees up funds that can then be used for his salary.  You see that he leans on this distinction in his latest blog post.  Further when a company like Google gives money to an academic center you run, this raises your academic profile, and likely raises your marketability and salary down the road.  Lessig does not address these ancillary benefits that are decidedly financial. Third in the case of Stanford Law the money was given to support his work.  He doesn’t use that as his helpful example in his “disclosure” now does he?

I have to say it again. Lessig is the former director of the Edmond J. Safra Center for Ethics at Harvard University.

But it gets worse.  Let’s look at how he defines “promote”

“I never promote as policy a position“: This is meant to distinguish work as a lawyer from work as an advocate. I don’t typically do legal work for money. But everyone should understand that when a lawyer speaks for his client, he speaks for his client. The corruption I am targeting is a lawyer or academic speaking not for a client, but presumptively, for the truth.

“promote” means in any public forum — so an op-ed, testimony, or a lecture.

I frankly don’t quite understand this.  But let me make a stab at it. He is an academic so he doesn’t really have any clients as a lawyer.  So this essentially let’s him “advocate” on behalf of a donor like Google without disclosing the donation as long as it’s the truth? I’m not sure I’m right on this. (I’m glad to be corrected on this one). Although I may not understand exactly what he’s trying to say, I do know a Mack Truck sized loophole when I see it.  This is basically a boilerplate escape valve to let him do whatever he wants. This also appears to be a post facto justification of his failure to disclose his funding in the NY Times op ed.

This time let’s say this all together: Lessig is the former director of the Edmond J. Safra Center for Ethics at Harvard University 2009-2015.

I’m a curious person.  And I did what anyone might do when contemplating Lessig’s curiously delimited disclosure ethics.  I stuck some full paragraphs of his disclosure into a search engine to see what came up.  I got this blog:

Guest Blog Post: Lawrence Lessig

Strange.  It’s a guest blog written by Lawrence Lessig hosted on the Andover academy website?!?  The blog is hosted by John Palfry a fellow at the Google-funded Berkman Klein center and also Head of School at Phillips Academy Andover. (For Brits think Eaton).  At first I thought Lessig was defending himself from something to do with his copyright positions.  Oddly, no. He was in fact defending himself from an seemingly unrelated appearance of impropriety. The Register (UK) reported that his iCommons foundation received money from an online poker tycoon. This was his response.

Wait what?! Online poker? What on earth does this have to do with copyright? Good question. In a nutshell The Register article explains that at least one Lessig affiliated institution (iCommons) appeared to have indirectly benefitted from the infamous for-profit piracy website MegaUpload.

And this is the moment the public image that Lessig has so carefully constructed begins to unravel. For if you follow the story all the way down, Lessig looks less a virtuous defender of liberty, free speech and the rule of law and more like a run of the mill academic/civil society huckster looking for money.

One may be forgiven for wondering at this point if Lessig has more to worry about than looking like a cats paw for Google.  This is criminal conspiracy stuff after all.

Indeed, court documents show that Google, through it’s subsidiary Adsense, AdBrite and an outfit called PartyGaming PLC helped MegaUpload generate hundreds of millions in revenues. From the Mega conspiracy indictment:

Before any video can be viewed on Megavideo.com, the user must view an advertisement. Originally, the Mega Conspiracy had contracted with companies such as AdBrite, Inc., Google AdSense, and PartyGaming plc for advertising.

And as Andrew Orlowski reported in 2010 this is how the money went into the Lessig affiliated foundation:

Shortly after [US anti-] gaming legislation was passed, iCommons received three large donations. Two were from newly-formed and secretive offshore trusts,  while the third was from the founder of PartyGaming, Russ DeLeon.

The first of the trusts was called IETSI, the International Electronic Trade and Services Initiative (IETSI) which made a substantial $1m donation to iCommons. IETSI describes itself as promoting e-commerce regulation, operating under Manx regulation, with a website registered in Gibraltar. But who was it a lobbying vehicle for? On its website, in addition to the Lessig vehicles its only other declared affiliation is with the Remote Gambling Association, the voice of online gambling.

The other donation was from the Kasuma Trust, a Gibraltar-based charitable trust devoted to at-risk children, educational work… and internet initiatives. Kasuma was set up by Anurag Dikshit and Soma Pujari in early 2007

It’s not really clear why the online poker tycoons contributed to iCommons. But obviously the donors had their reasons. Maybe some kind of shared unregulated internet ideology? Regardless shortly after his donation to iCommons, Dikshit cut a plea for violations of US online gambling laws and paid a $300 million dollar fine to the US Treasury. That’s a criminal plea.

Naturally the ethics professor directed iCommons to return the money.

No.

This time lets sing this all together in Queen Bohemian Rhapsody style harmony: Lessig is the former director of the Edmond J. Safra Center for Ethics at Harvard University 2009-2015.

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It makes me slightly queasy to type this final section.  It’s one thing to point out the hypocrisy of someone like Lessig based on the logic of his own arguments.  It’s another to point out that there is something deeply wrong and off kilter about the tone of his response to the Register article. Yet I must. This is the man who clearly established the shape of the debate as “artists v internet.”  Therefore his character is important. In his response to Orlowski Lessig is completely unapologetic and constructs elaborate even implausible self-referential justifications for why his actions are “correct.” He is particularly concerned that the public know his actions are completely consistent with his “disclosure” policy.  He can’t seem to admit his own fallibility. Yet nobody can live up to the standards they set for themselves, Lessig thinks that he has to pretend he does. It is sad and suggests to me an unraveling.  Read his response for yourself.  Here.  You’ll never see Lessig the same way again.

I’ve reproduced a portion of it here,as I suspect the Palfry blog will soon disappear:

Seventh, and most critically, iCommons.org is not a “for profit” entity. It is a not-for-profit entity. And it is not simply “registered in London.” It is a British Charity. Its first Chairman was Japanese. Its second Chairman was Brazilian. Its first Executive Director was British. Its second was South African. The majority of the board (I believe, but have not checked) has always been non-American. It is not subject to the jurisdiction of US law, except to the extent that it engages in activities here in the US. Since being launched as a UK charity, iCommons has never held any event in the United States.

I say all that to throw into relief the central confusion at the core of Orlowski’s essay. The nub of his charge against me is that I should have engineered the return of contributions to the iCommons charity because one of the two entities that contributed to it has pled guilty to violating US law.

Ok, but remember: iCommons is a UK entity. Whether or not Dikshit violated US law, neither he nor the founders of IETSI have been charged with violating UK law. I know Orlowski has US envy, but I should think THE REGISTER would recognize that the UK is neither a state nor a colony of the United States. And so why an alleged violation of US law should obligate a UK charity to return a charitable contribution is completely beyond me. If BP had advertised on The Register’s site, would The Register be obligated to return the advertising fee?

The most troubling bit of Orlowski’s piece, however, was the part he didn’t include. He ends his piece with the sanctimonious “[p]erhaps it’s naive to expect academics to uphold the values they preach.”

One might expect then that if he was charging me with not upholding the values I preach, he would at least mention what those values are. In my email to him, I had referred him to my “disclosure which states my “values.” Orlowski omitted that link in his essay. As that disclosure makes clear, my “values” are that I will not “promote as policy” positions for people who pay me, or who give a significant amount to a non-profit for which I have fundraising obligations.

Have I lived up to those values?

First, neither IETSI nor Dikshit ever paid me anything. Zero.

But second, the gift to iCommons plainly would trigger the obligation that I not “promote as policy a position” in the commercial interests of IETSI or Dikshit. That’s because I had a fundraising obligation to iCommons, and IETSI and Dikshit helped relieve that obligation through their gifts.

Orlowski nonetheless suggests that I violated this policy. But as I advised him by email (another bit of my email that he omitted from his essay), I had explicitly told the founders of IETSI and Mr. Dikshit before they gave their gifts that their funding iCommons would mean that I would not become involved in any policy debate that would advance their commercial interests. And indeed, I have not. I have never testified publicly, or promoted privately, any change in policy with respect to online gambling or poker. Instead, my behavior with respect to both of these contributors is precisely consistent with “the values [I] preach.”

Orlowski knew this all this, yet he wrote an essay that states precisely the opposite.

I don’t know what explains his fabrication. It may simply be the product of an extraordinarily sloppy mind. But the pattern here may suggest something more.

This piece is just the latest in a series of sloppiness or slander by Orlowski. The first was published almost a decade ago. In that piece, Orlowski apparently fabricated a quote he had attributed to my assistant. When she came to me in tears, I asked him to correct it. He refused, but invited me to dinner instead. I told him I was not interested in dinner with him; I simply wanted him to correct his error. He didn’t. Three years ago, he reported on a speech I gave at CISAC. That piece too was filled with apparently fabricated quotes, attributed to me. When I posted a blog entry that included snippets from a recording of the speech, demonstrating the fabrications, The Register cleaned up the quotes, but defended the piece by claiming — you can’t make this up — that Orlowski had invited me to dinner the night before the talk.

The good news about this latest is that at least this slander came with no invitation to dinner. For that I am grateful.

 

Before You Fire Off That Angry Email: Feinstein Supports the MMA Package!!

Just a quick note here.  Seems like there has been some confusion in the artist community about Sen Feinstein’s position on the MMA, specifically whether she supports the Pre-1972 provisions.  There should be no confusion. The ranking member clearly supports all three elements of the bill.

In her own words:

I’m proud to sponsor [the AMP Act] with Chairman Grassley which would for the first time provide federal copyright protection to the sound engineers and producers for the royalties to which they are entitled.

I know Smokey Robinson is here but we will do a more formal introduction in a few moments.

I want everybody to know that I’m pleased to support legislation to ensure artists are paid for their works that were recorded before 1972. One of the bills before us today would erase an arbitrary distinction under current law that provides the same copyright protections for digital streaming for all artists.

I also strongly support establishing new licenses that will make it easier for digital music companies to broadcast more music to larger audiences. The at the same time it’s important that the pass legislation that we don’t create unintended consequences.

Now the Senator did make some comments about the composition of the governing boards and treatment of unclaimed royalties that could be regarded as critical. But I think some folks have misinterpreted her comments as overall hostility to the act. This is ridiculous.  I suggest you look at the transcripts yourself, or better yet watch the hearings. The body language suggests a love fest.

For the tl/dr crowd here is the key section from Feinstein:

I’ve heard some estimates that the unclaimed royalties could be in the hundreds of millions of dollars.  This is indeed a very big deal and requires a good long look.  When looking at how to treat such a significant sum we need to ensure that the legislation does enough to find a songwriter that wrote the music… Are these individuals properly protected and are there sufficient incentives in place to find the people that the money belongs to?  And that is the great question I have in mind.

The Senator is echoing the same concerns voiced by dozens of songwriters on the division of unclaimed royalties. The Senator would appear to be an ally of songwriters on this issue. What other way is there to interpret this?  If anything she may be intending to provide more accountability and transparency to the unclaimed royalty process.  If you’re gonna send an email to Sen Feinstein, it should simply say “Thank you.”

Head of Justice Dept Antitrust Division to Speak At Publisher Conference–can end of ASCAP/BMI Consent Decrees be coming?

Really great news!  It was recently announced that the head of the Justice Department’s Antitrust Division will speak at the National Music Publishers Association annual meeting in June!

This year’s keynote will be presented by United States Department of Justice (DOJ) Assistant Attorney General for the Antitrust Division, Makan Delrahim.

As David said a few weeks ago before this announcement, Mr. Delrahim is reviewing hundreds of DOJ consent decrees that have accumulated over the decades to see if these government orders should be continued.  This review includes the ASCAP and BMI consent decrees that Mr. Delrahim specifically mentioned in an address at Vanderbilt Law School earlier this year.  He seems to have come to this idea all by himself.

What’s really great about this is that it could mean the end of consent decrees in a relatively short period of time.  Since it’s never happened before, we don’t know exactly how the end of the consent decrees would impact ASCAP and BMI, but presumably the impact would be positive and quick. Goodbye rate court!  The smart money would probably be on existing rate court cases continuing, but disallowing new cases.  (Mr. Delrahim has been clear that the enforcement side would remain in place, meaning we guess that actual antitrust law violations would be dealt with case by case, just no ongoing regulatory oversight by unelected rate courts.  Example would be Global Music Rights awesome antitrust case against the broadcasters after the broadcasters brought one against GMR.)

It could possibly open the door to both organizations getting into the mechanical licensing administration business in competition with whatever comes of the collective established by the Music Modernization Act (which permits voluntary licenses outside of the collective).  In fact, BMI has already said they intend to pursue licensing outside of performances because their consent decree allows them to do so unlike ASCAP’s:

BMI is also evaluating the option of licensing beyond the performing right. We have long believed our consent decree allows for the licensing of multiple rights, which is why four years ago we asked the DOJ to amend our decree to clarify that ability, among other much-needed updates.

Of course, the last thing that anyone would want is for the DOJ to end the consent decrees, just to be replaced by some other bunch of regulations or bureaucracy.  For once, broadcasters will just have to suck it up.

So it’s a great idea that NMPA is inviting Mr. Delrahim to speak to the publishers who are most in the position to take advantage of a new dawn in songwriter freedom.  Many if not most of the NMPA members will be in the voluntary licensing category under MMA and outside the collective.  They would be in a fantastic position to support a one-stop shop for performance and mechanical licensing from ASCAP and BMI in line with what SESAC/HFA can offer, and presumably GMR could do as well.

@christycrowl: The Music Modernization Act Creates A Database — Is It A Landmark or Landmine for Music Creators, Producers, and Performers? (Part 1) — Artist Rights Watch

From what we have gathered, on May 15, the Senate [held a hearing] on the Music Modernization Act (which now includes the Classics Act and the AMP Act). It’s flying through the walls of government faster than anything we’ve ever seen. Some call it unprecedented. Some say it’s been a long time coming. The music member organizations are touting this as if we are finally getting our moment in the sun. But are we really?

ASIDE FROM CREATING A DATABASE — IS THE MMA A LANDMARK OR LANDMINE FOR MUSIC CREATORS, PRODUCERS, AND PERFORMERS?

There are arguments on both sides from within the music creator community, and it is hard to know who is “right.” All we know is that all of the “member” organizations that directly impact how musicians and music creators get paid (the AFM, ASCAP, BMI, SoundExchange) have communicated to their members to support this bill, to sign numerous petitions to Congress to ensure it passes, etc., without much member discussion on what the cons are of the legislation. In addition, the advocacy organizations (NARAS, SONA, NSAI, the SCL) have also trumpeted support without much point by point member discussion or debate, which to us is deeply concerning.

Is the MMA truly a landmark win for ALL music creators? Will money start flowing to the “little guy” who doesn’t have a publishing deal and plans to utilize streaming services to distribute his/her music, who is totally DIY, who doesn’t understand/care about the inner workings of the music industry and what the difference is between AFM, SAG-AFTRA, ASCAP, BMI, SoundExchange, and Advocacy-only groups such as NARAS, SONA, and NSAI? (This, by the way, is the majority next generation DIY musicians who upload millions of tracks into the streaming services every year.) What will REALLY change for that DIY music creator, producer, or performer? Can he/she plan to retire off of the whopping increase in earnings that passing the MMA will provide? Will they be able to figure out how to register to get their windfall in time before the publishers who are behind the MMA claim it?

If the MMA legislation is so much of a windfall moment for all music creators, producers, and performers — why is it so hard to find a concrete example (or have the advocacy groups even CREATE an example to relate to) of a DIY music creator and how the MMA will help him/her earn more income for their music (or musical contribution) from streaming? Why haven’t the member organizations provided examples of “if you wrote this, recorded this, produced this, and/or released it on a streaming platform, this is how passing the MMA will improve your music creator/producer/performer life” as a part of their non-stop rally of support for this bill? And what about the musician unions? If they want musicians to support the MMA, why haven’t they provided any examples of how a session musician (or lead singer) who played/sang on a track that is now released on a streaming service will benefit?

YOU HEARD IT HERE FIRST: THE “LANDMARK” DATABASE WILL MAKE OR BREAK THE MMA’S (THE MLC’s) SUCCESS

Read the post on Medium

 

No MMA Bait and Switch #irespectmusic: @terrencehart: No, the CLASSICS Act is not a “term extension”

Lemley Google Transparency

Mark Lemley’s record from Google Academics.

Artist Rights Watch

[Editor Charlie sez:  As David Lowery has posted, it’s looking like the Senate version of the “Music Modernization Act” may not include the CLASSICS Act which would require royalty deadbeats at the Digital Media Association, SiriusXM and Pandora to pay their fair share of performance royalties for our legacy artists who recorded before 1972.  This loophole has been exploited and defended by the head of the Digital Media Association while he was formerly at SiriusXM and Pandora.  David caught him promoting a position from Google shills Public Knowledge and now Terry Hart has called out Professor Mark Lemley for trying to pull the bait and switch from the House bill to the Senate version of MMA (which means “Music Modernization Act” not “Make More Algorithms”).  Professor Lemley has plenty of entries in the “Google Academics” database, a handy tool for tracking Google’s influence.]

On April 25, the U.S. House…

View original post 293 more words

@mikehuppe: “We are Making Major Progress on Music Licensing Reform – Together” #irespectmusic — Artist Rights Watch

While several pieces of music legislation have been introduced in the Senate, there is not a single comprehensive package yet. We are encouraging our Senate allies to bring these many issues together into a single, comprehensive Music Modernization Act, like the bill passed in the House.

via @mikehuppe: “We are Making Major Progress on Music Licensing Reform – Together” #irespectmusic — Artist Rights Watch

Frog Gives Scorpion Ride: Is DiMA Trying To Strip MMA of Pre-1972 and AMP Protections in Senate?l

Artists give Digital Media Association (DiMA) ride from House to Senate (illustration Mīrzā Raḥīm 1847 public domain).

Wikipedia summarizes the fable of the Scorpion and the Frog as follows:

A scorpion asks a frog to carry it across a river. The frog hesitates, afraid of being stung, but the scorpion argues that if it did so, they would both drown. Considering this, the frog agrees, but midway across the river the scorpion does indeed sting the frog, dooming them both. When the frog asks the scorpion why, the scorpion replies that it was in its nature to do so.

Something similar appears to be happening as MMA moves to the Senate. The part of the scorpion is (naturally) being played by DiMA (Spotify, YouTube, Google, Amazon, Apple etc).

As you may have heard the Music Modernization Act passed the house 415-0 vote. Unprecedented.  The show of unanimous support was largely the result of a grand compromise that gave everyone something.  Songwriters, publishers, PROs,  performers, labels, producers and digital services all will see some benefits from the bill.

The Music Modernization Act achieves this consensus  by combining three separate bills:

  • Original Music Modernization Act which reforms how compositions are licensed in the digital realm and rates are set.  Championed by publishers, streaming services and many songwriter groups.
  • Classics Act: Fixes pre-1972 “loophole” that has allowed digital services like Google, Pandora and Sirius argue they do not have to pay performers that had the misfortune to record before 1972.   Championed by performers,  labels and some digital services.
  • AMP act: Allows producer and mixer royalties to be paid directly from SoundExchange. Currently most producers and mixers  have to wait for labels to process digital public performance royalties (if they get them at all).  Championed by National Recording Academy (Grammys), mixers and producers.

Something for everyone.  This is how compromises work.

DiMA represents digital streaming services and policy is heavily dominated by Google and Spotify. 

Now it appears that through the use of proxies  and two-faced lobbying DiMA is trying to abrogate the entire compromise by stripping out the Pre-1972 and producer/mixer protections.  There is a little inside baseball that must be explained here.  Public Knowledge is an astroturf organization that appears to uniformly represent the interests of Silicon Valley.  As one former employee remarked to me in 2012 “policy is 100% Google.”  This is evidently true, just look at their policy positions. 

Curiously the day after the full MMA passed the house Public Knowledge posted this story advocating stripping out pre-1972 protections from the act:

https://www.publicknowledge.org/press-release/public-knowledge-urges-senate-to-consider-music-modernization-act-and-classics-act-separately

Now pay attention. Think there is no connection other than the Google funding?

Here is the CEO of DiMA seven weeks earlier (March 7th) retweeting Public Knowledge letter which advocates stripping out elements of MMA that protect pre-1972 performers.  This is not his personal account.  This is the official @CEO-DiMA account.  This is while Christopher Harrison and DiMA are supposedly singing Kumbaya with performers and rights holders.

Centruroides vittatus

On top of that we see are told by reliable sources that the  US Representative from Google -oops I mean Mountain View  (Zoe Lofgren) was poised to offer an amendment that would have effectively stripped the MMA of the Pre-1972 protections.  At the last minute she dropped her amendment.  We now see why. There was a plan afoot to strip it out in the Senate.

This clearly was the plan all along:

  1. Get all rights holders and services together on a compromise bill in the House.
  2. Strip out crucial elements of compromise in Senate and pass a bill that favors digital services.

If this looks like the SESTA House/Senate shenanigans it’s because it is largely the same companies and lobbyists on digital side.

Now that DiMA has been exposed our hope is that those that represent songwriters, performers, producers, labels and publishers direct the same opprobrium at DiMA that they directed towards dissenting rightsholders before the compromise came together.

We’re not sure but we think the above paragraph might be an excerpt from an alternate-reality sci-fi novel based on Lavrenty Beria’s diary. 

Spotify’s Big Lie, Streaming Habits Mirror Purchasing Habits

One of the biggest lies told by Spotify is that streaming will provide more revenue over the life of a record because every play will be monetized. This as opposed to the one time payment earned from a transactional purchase where all the revenue from the purchase of the record is paid at once. There is however, a very big problem with this theory, which is that the consumption curves of streaming match the consumption curves of transactional sales.

So, what about that so called long tail? Well, it doesn’t exist. Not for music consumption. Or we should say, it doesn’t exist any different for streaming than it did has for transactional sales. What do you think is more profitable in generating revenue? Is it the album sales of artists catalogs, or is streams?

Keep in mind, streaming is a fixed cap market. So it does not matter how much the market grows in actual consumption, the revenue is capped by the amount of revenue earned by the hosting provider. If consumption doubles, but revenues stay flat, every stream is worth half of what it was previously.

We’re already seeing this trend as we noted earlier this year that Spotify per stream rates appear to be dropping steadily by about 8% per year. This is likely a combination of both the growth of consumption and the slowing of revenue across both subscriptions and advertising.

If anyone truly believes streaming is going to generate more revenues than transactional sales, we have a bridge in Brooklyn to sell you cheap. The fix is simple. The industry must move towards adopting an industry standard streaming penny rates. Only by setting fixed per stream rates will compensation scale with consumption.

[NOTE:] Chart from a mid size indie label showing revenues from Downloads and Streaming. The Spikes indicate new release activity / hits which reveals that revenue tails off for streaming the same way it does for transactional downloads.

New Antitrust Chief’s Comments (Positively) Complicate Songwriter Calculus on MMA

 

Is Assistant Attorney General Antitrust Makan Delrahim songwriters’ new best friend? 

Other than Chris Castle at MusicTechPolicy no one in music business seems to have noticed that the Makan Delrahim the new DOJ antitrust chief is suggesting ending many (if not all) so-called “consent decrees.”  Consent decrees are a kind of regulatory supervision imposed by the DOJ in lieu of prosecuting firms for anti-competitive behavior.  These decrees were originally intended to be temporary. The ASCAP decree was “temporarily” put into effect in 1941.  Over the years many have evolved into  permanent regulatory structures that are likely unconstitutional (they are in effect pseudo legislation).

I have spent considerable time in the last two weeks reading Delrahim’s comments and writings on anti-competition law.  I think the odds are better than even that Delrahim will end the songwriter consent decrees.  I say this because he has long held views against the “regulatory” consent decree approach and prefers “structural remedies” to anticompetitive practices. Second Delrahim specifically cited the ASCAP consent decree as an example of “bad” anti-competition regulation and noted how much the music licensing landscape has changed.  Third, Delrahim seems to have quietly let the 100% licensing requirement for PROs die. Finally, my understanding is he could end the consent decrees with a stroke of his pen.   Odds look good, but I could be wrong.

How badly do the Consent Decrees Distort Income? 

Your average workaday songwriter is usually unaware that these consent decrees negatively impact the rates for public performance royalties (BMI and ASCAP royalties).  The royalty rates imposed by the consent decrees push down royalties across the board.  The ultimate absurdity is the resultant performance rates we songwriters receive from YouTube.

As an example, second quarter June 2017 my 40% ownership in the song “Low” earned me performance royalties of  $30.78 cents for 589,553 YouTube streams.  For a 4:36 second song that is over 5 years of music.  So if you listened to music for 5 years straight 24 hours a day on YouTube the performance royalty to all songwriters would be $76.95.  Since no one listens to music 24 hours a day this is clearly decades of music. YouTube is able to exact this usurious royalty rate, because they can simply threaten to not pay it and tie songwriters up (no pay) for years in the DOJ “consent decree” regulatory process. This is essentially what Pandora did a number of years ago.  Surprise surprise, this tends to depress the market value of songs.

What happens without the Consent Decrees?

It is not entirely predictable.  But if you look at the current rates imposed by BMI/ASCAP antitrust rate courts for digital services it is hard to imagine that they would stay this low.  The current system effectively acts as a cap on songwriter pay.  More importantly without the consent decrees BMI and ASCAP would be allowed to  offer additional services.  For instance they could offer not just performance licenses but also “streaming mechanical” licenses. Right now they can not.  While independent songwriters and publishers have had no problem getting paid their performance royalties from streaming services via BMI and ASCAP virtually every independent has had problems collecting the streaming mechanical.  (Hence the class action lawsuits.)

SESAC, the one songwriter PRO not subject to the consent decrees, is able to offer streaming mechanical licenses as well, via its subsidiary HFA.   While HFA has had its share of problems, this approach ultimately could be a much more efficient solution for digital services as well as songwriters.

Is Ending the Consent Decrees for Songwriter Organizations a Radical Proposal?

No. Nothing like the consent decrees for songwriters exist in the rest of the world. In fact the opposite is the norm. Generally songwriters are usually granted exceptions from anti-competition laws.  Many countries allow for performing rights organizations to license streaming mechanicals thus making licensing easier for digital services, songwriters and publishers alike.  Here in the US the Nashville Songwriters Association International and PROs themselves have argued for ending or at least modifying the consent decrees in the manner described.

From the US Copyright Office Music Licensing Report (2015):

There appears to be broad agreement among stakeholders that PROs and other licensing entities should be able to bundle performance rights with reproduction and distribution rights, and potentially other rights, to meet the needs of modern music services. NSAI, for example, opined that “[t]he most efficient path to digital service providers obtaining necessary licenses would be to allow the PRO’s to license and collect mechanical royalties.”

And in 2014 comment to the Copyright Office Spotify itself entertained the idea of PROs issuing mechanical licenses:

“A licensing regime in which public performance rights and mechanical reproduction rights could be obtained from a single source or pursuant to a single license is an interesting idea and could in theory lead to efficiencies.”

James Duffet-Smith Spotify’s then head of licensing ultimately failed to endorse the concept, but clearly his musings indicate it was not “off the table.”

Ending the Consent Decrees Would be Pro-competitive.

A rational phase out of the consent decrees would  be pro-competitive. There are already four PROs in the US.  The only thing that has kept them from competing more effectively on price and services, is that every time the two PROs not under consent decrees (SESAC and GMR)  try to innovate licenses or get higher rates for songwriters they are invariably threatened with consent decrees. Think about it: every time there is a pro-competitive variation in prices or licenses the threat of consent decrees tamps down competition and aligns prices and license terms.  The consent decrees are objectively perverse incentives that limit competition. Also it should be kept in mind that, major music publishers and large independents already license both performance rights and mechanical royalty rights.  There is no lack of competition on the songwriter/rights holder side. Other than a bogus “pre-crime” rationale there is no need for consent decrees to ensure competition.

PROs are Efficient Because they License Repertoires not Individual Songs

Often missed in the debate over mechanical streaming rights and PROS, is that fundamentally performing rights organizations have an efficiency built in. They provide music users and digital services with access to every song in a songwriter’s catalogue.  Old songs, brand new songs and the songs yet to be written.  There is not a need for a service to update their licenses for each new song.  For instance a BMI licenses give a service access to all BMI writers songs (and fractional songs) past, present and future.

What Does this Have to do with the Music Modernization Act?

The main rationale of the MMA is that songwriters “trade” with digital services some future (possible but not guaranteed) improvements in how performance rights are calculated, and in exchange songwriters grant  immunity from lawsuits to streaming services. Now,if the consent decrees go away, there is no “trade” here.  Songwriters get nothing. Publishers do however still get access to the inevitable “blackbox” created in the time between passage of the law and launch of the collective to distribute mechanicals.  Sadly, this I suspect is a motivation for some publishers.

Second the MMA has been “shopped” by publishing and songwriter elites under what now appears to be a false pretense: that the consent decrees will never go away.  This is probably not true.  It strikes me that songwriter organizations, publishers and PROs failed to do their homework on Delrahim.  If you eliminate the consent decrees why would ASCAP or BMI need the MMA?  Especially if you consider that there is nothing stopping the MMA’s proposed  “Mechanical Licensing Collective” could just as easily issue performance licenses.  That is the proposed mechanical licensing collective could swallow ASCAP and BMI.  Also what’s the point in SESAC having the Harry Fox Agency?  How does that compete with the new quango created by the MMA?  Beware of any claim from the PROs that on balance the consent decrees help songwriters.  They do not. They are a net negative and the fiduciary responsibility of the PROs require them to communicate this accurately to their songwriters. (And yes we will be watching.)

Third the MMA proposes a vast new bureaucracy that would less efficiently (song by song not by repertoires) duplicate what ASCAP and BMI already do.  How is it possibly more efficient to do anything twice and the second time less efficiently?  One set of licenses for the performance rights by repertoire and then song by song licenses for the mechanical licenses.  I’d love to see an economist look at the MMA/consent decree interaction.  Perhaps we can borrow one of Delrahim’s economists? After all he has explicitly stated that economic analyses will influence his consent decree decisions going forward.

Simplify the Music Modernization Act

With this in mind I suggest that the way forward is to simplify the Music Modernization Act.  The most contentious, expensive  (and longest) part of the Music Modernization Act is the proposed Mechanical Licensing Collective and associated database.  I have long contended you can’t create an accurate ownership database of all songs. A list of “all songs” is a dynamic list with thousands of songs being added every day.  Publishing catalogue ownership also often changes hands. However it is possible to make a list of “exceptions.”

Instead of a list of “everything” the logical approach is to make a much much smaller list of songwriters/publishers that wish to withhold streaming mechanicals from the PROs.   The Music Modernization Act could be simplified to this:

  1.  Explicitly end the consent decrees for publishers
  2. Allow PROs to issue mechanical licenses
  3. If a songwriter or publisher does not wish the PRO to administer the mechanical right they must explicitly make this known by joining the “opt out” list.  This would be machine readable. It would include information on how to license the song.
  4. If a songwriter or publisher fails to join the opt out list, the digital services and music users may then fall back on the PRO license to pay mechanicals. This guarantees responsible services immunity from lawsuits.

You can see my original compromise proposal here:

https://thetrichordist.com/2017/06/27/a-compromise-proposal-to-fix-streaming-royaltieslicensing-and-notification/

Professor Michael Geist’s Fingerprints are on Bogus Human Rights Claim Against Canada.

Yesterday I published an article detailing the Human Rights complaint against Canada by David Kaye a so-called “UN Rapporteur for Freedom of expression.”  While citizens of authoritarian governments worldwide are subject to restraints on freedom of expression, Professor David Kaye decided the four alarm fire for freedom of expression is a rather modest proposal to block pirate websites under Canadian national law.  This is similar to laws that are in place in at least 20 other (democratic) countries.

The important of my article is that I noticed that the UN Human Rights Special Rapporteur had engaged in a deceptive sleight of hand.  He claimed his analysis was based on existing international, national, and regional law.  But upon drilling down we noticed he was actually referencing aspirational agreements by mostly technology company funded astroturf groups.  Of particular concern was his reliance on The Right To Share and The Manila principles.  These two documents do not hold the force of law and the Rapporteurs reliance on these documents for his complaint against Canada is dishonest, deceptive and possibly illegal.  These documents are the international treaty equivalents of “Fake News.” Hence “bogus.”

Read more here: https://thetrichordist.com/2018/04/01/gone-phishing-un-official-uses-lookalike-website-in-attempt-to-block-anti-piracy-law/

Today while perusing comments I discovered that the (federally funded) Canadian Research Chair Michael Geist, may be in on the whole deception.  Look at this curious comment in Geist’s submission to the CRTC on the website blocking proposal:

Spooky. It’s almost as if Geist knew the UN Special Rapporteur was gonna file a complaint.  A complaint that also happens to cite aspirational non-legally binding documents that appear to be co-authored by Geist.

Academic freedom is one thing. Participating in a conspiracy to mislead the CRTC is another. I suggest that those investigating this manner,  use freedom of information laws to look for communications between Geist and the the UN Rapporteur.