It sure costs a lot of money to give things away for free: Supreme Court Brief of @davidclowery, @helienne, @theblakemorgan and @sgawrites in Google v. Oracle Part 3

Google’s appeal of its major loss to Oracle on fair use is shaping up to be the most important copyright case of the year, if not the decade.  It could set fair use standards for years to come.  We’re going to be posting installments from the friend of the court brief that David, Helienne, Blake and The Songwriters Guild filed in the U.S. Supreme Court supporting Oracle in the Google v. Oracle fair use case.  This is part 3.  We decided to omit the footnotes for this posting, but you can read the whole brief here.

Cover Page
Cover Page of Friend of the Court Brief

ARGUMENT

I. INDEPENDENT ARTISTS AND SONGWRITERS RELY ON COPYRIGHT
PROTECTION AND CLEAR FAIR USE STANDARDS TO DEFEND THEMSELVES
IN THE MARKET (continued from Part 2).

Google interacts with the music industry in a variety of ways, but primarily through its YouTube video platform. YouTube is by far the world’s most popular music streaming service, with over 1.9 billion registered users as of June 2018. It is much, much
larger than subscription-based services like Spotify (with 160 million users) or Apple Music (with 45 million users). According to the International Federation of the Phonographic Industry, nearly half of all streaming users consume music on YouTube. It is hard to be in the music business online and not do business with YouTube.

And in turn, music is a large part of YouTube’s business. As of Jan 2020, 93% of the most-watched videos were music videos.” Kit Smith, 54 Fascinating and Incredible YouTube Statistics, Brandwatch (Jan. 17, 2020) available at https://www.brandwatch.com/blog/youtube-stats/; “47% of time spent listening to on-demand music is on YouTube,” Music Consumer Insight Report, International Federation of the Phonographic Industry (IFPI) at 13 (2018). This revenue accrues to Google’s great benefit, with its parent company Alphabet reporting more than $15 billion in revenue from YouTube last year alone.

Unfortunately, despite YouTube’s market success, revenue does not proportionately flow back to copyright owners. In the aggregate, advertising-supported free streaming services (of which YouTube is by far the largest) contributed one-third of all streams in 2018, but only 8% of total revenue. See Recording Industry Association of America, RIAA 2018 Year End Music Revenue Report (Feb. 2019). YouTube’s royalty rates are consistently lowest among the top digital music services.  In fairness, Google does contract with aggregators representing independents to collect YouTube royalties, such as Audiam.
However, in Amici’s experience, YouTube is the primary music service that actually incorporates an ad hoc and arbitrary exploitation of copyright safe harbors
and exceptions like fair use as a part of its largely advertising-supported business model which is grounded substantially on “user-generated content” or “UGC.”

Therefore, YouTube is incentivized to unfairly attempt over and again to utilize narrow, statutory exceptions to copyright protection, including the fair use doctrine, on a seemingly ad hoc and extremely expansive basis to undermine the very protections that
creators rely on. This unpredictable fiat guides YouTube’s partners toward monetizing their UGC—which generates a reward of revenue that YouTube shares with the partner. Google’s exploitation of fair use as a business significantly increases the transaction cost of dealing with YouTube beyond what independents like Amici can reasonably afford. It sure costs a lot of money to give things away for free.

This is particularly true since independents cannot credibly use litigation as leverage against a commercial giant. Examples of these costs include engaging services to identify infringements and send takedown notices under the Digital Millennium Copyright Act (hereinafter DMCA) for infringing links in search or on YouTube, or analyzing fair use claims in counternotifications. See 17 U.S.C. §§ 512(c)(1)(C), 512(g). Nor are these costs common across other ad-supported digital music services. For example, Amici
do not bear these high transaction costs with other ad-supported digital music services such as Spotify’s free version.

It appears to Amici that Google’s business model, both with YouTube and with its verbatim copying in Android, are prime examples of what one of Google’s
amici has repeatedly proclaimed to be the “fair use industries.”

Amici—like most creators—do not think of fair use as the basis for an “industry” whose “rights” can be asserted separately from authorship furthered by reliable rules of copyright protection and narrow exceptions under individualized, special circumstances.
If fair use were an “industry,” Amici would be rendered into both the unlicensed input and the royalty-free output of that economic sector, destroying the market balance that has developed under copyright regimes over a period of centuries. Rather, fair use is a
statutory defense that permits creators to use copyrighted materials for well-defined and generally noncommercial or noncompeting purposes. Without copyright, of course, there is no fair use. At best, the notion of “fair use industries” and its protection is a non-sequitur. At worst, it is a destroyer of markets and eventually of national cultures.

In short, the “fair use industries” spin is Google’s attempt to invent cover for its extremely predatory market practices against creators.  Amici are concerned that “fair use industries” are merely those markets in which Google’s monopoly power permits it to simply ignore the copyright interests of other market actors (including and especially independent creators) and call its conduct fair use, safe in the knowledge that challenging Google in court is a nonstarter for most independents. This spin is bolstered through funding academic research as well as outright lobbying and strategic litigation that consistently weakens copyright and undermines creators. Even Google’s amici in this appeal include individuals paid by or otherwise associated with Google. See Br. of 83 Computer Scientists at A1 n.1.

In fact, Google reportedly said as much to former Prime Minister David Cameron when lobbying him in 2011 to amend UK copyright laws to remove “barriers to new internet-based business models” raised by the “costs of obtaining permissions from existing rightsholders.”  Adam Sherwin, David Cameron’s “Google-Model” Vision for Copyright Under Fire, The Guardian (March 14, 2011) (“[Prime Minister Cameron’s announcement] was greeted with unalloyed delight at Google’s California HQ—and left the music industry, ravaged by web piracy, with that all too familiar sinking feeling.”).

Of course, Google’s responses are essentially the same each time—as they are [in the Oracle case].  Google wields a variety of weaponized copyright exceptions on top of rhetoric that is both deceptively public-spirited (letting Google win is “promoting innovation”) and ominous (impeding Google would “break the internet”). Google further seeks to justify these exceptions by trying to hide behind small players. It engages in astroturfing tactics to give the impression that it has more public support than it does.

All of this is on display in Google’s brief and its many amicus briefs. See, e.g., Pet. Br. 44 (“Android is an open source initiative that benefits hundreds of device manufacturers, millions of developers, and more than a billion consumers around the world.”), 45
(Android “enabled Java developers to unleash their creativity” by using Google’s platform), 49 (“Android benefitted Oracle”); 50 (finding against Google “would
disrupt the ongoing development of modern, interoperable computer software”).

[To be continued:  Google’s Use Is Clearly Commercial]

by thetrichordist

Google’s Fair Use Industries Part 2: Supreme Court Brief of @davidclowery, @helienne, @theblakemorgan and @sgawrites in Google v. Oracle

Google’s appeal of its major loss to Oracle on fair use is shaping up to be the most important copyright case of the year, if not the decade.  It could set fair use standards for years to come.  We’re going to be posting installments from the friend of the court brief that David, Helienne, Blake and The Songwriters Guild filed in the U.S. Supreme Court supporting Oracle in the Google v. Oracle fair use case.  This is part 2.  We decided to omit the footnotes for this posting, but you can read the whole brief here.

Cover Page
Cover Page of Friend of the Court Brief

ARGUMENT

I. INDEPENDENT ARTISTS AND SONGWRITERS RELY ON COPYRIGHT
PROTECTION AND CLEAR FAIR USE STANDARDS TO DEFEND THEMSELVES
IN THE MARKET.

Copyright is of critical importance to independent creators and artists. It is not empty rhetoric to say that without the statutory and constitutional protections of copyright, professional creators could not earn their livings and simply would not produce new works, and the world would be poorer for it.  The reason is simple but profound: copyright protection allows for a vibrant creative environment in which artists can predictably recover the gains of their creative labors. See U.S. Const. Art. I, § 8, cl. 8; see also Harper & Row Publishers, Inc. v. Nation Enters., 471 U.S. 539, 558 (1985) (“By establishing a marketable right to the use of one’s expression, copyright supplies the economic incentive to create and disseminate ideas.”). Because Congress has codified this incentive structure through centuries of copyright legislation, independent artists
and songwriters regularly rely on the exercise of their exclusive rights by creating, reproducing, distributing and publicly performing their works.

Importantly, these rights are not just abstractions.  They tangibly alter the licensing negotiations vital to a modern creative ecosystem. An exclusive right to exploit a creative work (such as a musical composition or a sound recording) can be the only backstop against markets where the marginal cost to digitally create perfect copies of an original is nil. See Metro-Goldwyn-Mayer Studios Inc. v. Grokster, Ltd., 545 U.S. 913, 928 (2005) (noting “digital distribution of copyrighted material threatens copyright holders as never before, because every copy is identical to the original [and] copying is easy”). These burdens do not fall solely on creators of sound recordings or musical compositions, but extend across copyrightable subject matter, including visual arts, motion pictures, and literary works such as novels or software. See 17 U.S.C. §§ 101, 102(a).

To be sure, independent creators may also benefit from uses that fall under the category of fair use. Fair use helps disseminate the artist’s work to the larger culture, and increases the amplitude and quality of discourse within and surrounding the work—all without compromising the work’s value. See Campbell v. Acuff-Rose Music, Inc., 510 U.S. 569, 578 (1994) (noting fair use must be analyzed “in light of thepurposes of copyright”); Pierre N. Leval, Toward a Fair Use Standard, 103 Harv. L. Rev. 1105, 1107 (1990). (“[f]air use should be perceived . . . as a rational, integral part of copyright, whose observance is
necessary to achieve the objectives of that law.”). It is therefore not surprising that a significant number of fair use cases arise in the music business. See, e.g., Campbell v. Acuff-Rose Music, 510 U.S. 569 (1994); Estate of Smith v. Graham, No. 19-28 (2d Cir. Feb. 3,
2020); Capitol Records, LLC v. ReDigi Inc., No. 16-2321 (2d Cir. Dec. 12, 2018); Lennon v. Premise Media Corp., 556 F. Supp. 2d 310 (S.D.N.Y. 2008); Fisher v. Dees, 794 F.2d 432 (9th Cir. 1986); Elsmere Music, Inc. v. Nat’l Broad. Co., 482 F. Supp. 741 (S.D.N.Y.), aff’d, 632
F.2d 252 (2d Cir. 1980).

Yet these fair use benefits only accrue when the analysis is predictable, consistent, and respectful of the underlying existing copyright incentives for original creation. Under such market conditions, independent creators nearly always stand ready to license their works at a fair market rate to those who respect their rights. This is how fair use works effectively within the creative industries. On the other hand, the more amorphous and unreasonably expansive the analysis and application of the fair use doctrine, the harder it becomes to establish the value of the copyrighted work during licensing negotiations that are the lifeblood of the creative ecosystem.

In the modern music business, such licensing negotiations are intricate and delicate. The exclusive rights guaranteed by the U.S. Copyright Act have allowed independent songwriters, recording artists and labels to contract with distributors such as Audiam, CD
Baby, INgrooves, Merlin Network, The Orchard and TuneCore. These aggregators in turn sublicense collectively to interactive, on-demand digital delivery services like Amazon Music, Apple Music, Deezer, iTunes, Google Play Music, Pandora, and Spotify in return for royalties that the aggregators pay to their songwriter or artist licensees.

SoundExchange, for example, administers the limited statutory performance license for
noninteractive exploitations of sound recordings. See 17 U.S.C. § 114. Through this statutory scheme, SoundExchange oversees the statutory license of sound recordings used by many noninteractive services such as Pandora, SiriusXM, iHeart Radio and other Internet radio services as well as business establishments. Meanwhile, performing rights organizations like ASCAP, BMI, Global Music Rights and SESAC collectively license the public performance of the corresponding compositions.

Artists and songwriters rely on this intricate market system of licensing that is entirely based on the exclusive rights of copyright owners and the traditionally reasonable application of the fair use doctrine. These market practices have, over the past two decades, undergone a metamorphosis, as new customs evolved in the digital age, emerging once again into a predictable licensing landscape. The exclusive rights that independents enjoy as copyright owners allow them to compete with the licensing, distribution and marketing operations of major labels and music publishers—when those rights are respected.

And that is where Google’s seemingly perpetual campaign for fair use expansion becomes a major hindrance in the equitable and efficient functioning of
the marketplace.

[To be continued]

by thetrichordist

The Fair Use Industries: Supreme Court Brief of @davidclowery, @helienne, @theblakemorgan and @sgawrites in Google v. Oracle

Google’s appeal of its major loss to Oracle on fair use is shaping up to be the most important copyright case of the year, if not the decade.  It could set fair use standards for years to come.  We’re going to be posting installments of the friend of the court brief that David, Helienne, Blake and The Songwriters Guild filed in the U.S. Supreme Court supporting Oracle in the Google v. Oracle fair use case.  You can read the whole brief here.

Cover Page
Cover Page of Friend of the Court Brief

SUMMARY OF ARGUMENT
Independent creators rely on copyright protection to safeguard their works. This is true not just of songwriters and composers, but of countless creators, including recording artists, photographers, filmmakers, visual artists, and software developers. Copyright is,
in fact, of existential importance to such creators, who would be utterly lacking in market power and the ability to earn their livings without it.

Google’s business model is a prime example of the need for strong copyright protection. Since Google’s founding, Amici have experienced, observed and believe that Google has used its unprecedented online footprint to dictate the terms of the market for creative works.  By tying together a set of limited exceptions and exclusions within the U.S. Copyright Act and analogous laws in other countries, and then advocating for the
radical expansion of those exceptions, Google has amplified its own market power to the great detriment of copyright owners. Thus, where fair use is meant to be a limited defense to infringement founded on the cultural and economic good for both creators and the public, Google has throttled it into a business model: what its amicus brazenly refers to as the bedrock on which rests the fictitious “fair use industries.”

There is no shortage of amici exhorting this Court to weigh carefully the implications of this case’s fair use issues, and their resolutions. Amici today simply join the chorus of those seeking to illustrate Google’s longstanding pattern of integrating willful copyright
infringement into its business model. Google does so, as it did here, by advocating for fair use exceptions so broad as to include its wholesale, verbatim copying of Oracle’s declaring code and structure without a license.  Google’s flagrant disregard of original expression in order to make a larger profit—by taking without authority the works belonging to others—compromises any argument that its use is non-commercial,
transformative, or in any sense “fair.”

Accordingly, the Federal Circuit was correct in finding that the nature and purpose of Google’s unlicensed use of Oracle’s code and program organization was to create a commercial substitute in the form of Android. It is abundantly clear that this
unauthorized substitution is not in the public interest. Here, Google’s claim to be, “promoting software innovation” is just a code word for promoting Google’s
interest in extracting higher profit margins out of the pockets of creators. Given that its interest in doing so is antithetical to incentives to create original works, finding fair use would clearly not serve the constitutional and statutory purposes of copyright.

[Tomorrow: Independent Artists and Songwriters rely on copyright protection and clear fair use standards to defend themselves in the market.]

by thetrichordist

DOJ Workshop on Free Market for Music Licensing Lacks Free Market of Voices

The Antitrust Division of the Department of Justice has announced the speakers for a series of public–but not too public please—workshops regarding the competition in licensing  music public performance rights.  Inevitably, this means a discussion of the ASCAP and BMI consent decrees.  So why wouldn’t you want to be as inclusive as possible in a discussion about free market competition?  Doesn’t the free market start with the free market of ideas?

Let’s be clear—as a general proposition, we despise these ancient consent decrees.  There’s a very simple reason for that view:  The consent decrees are like original sin visited upon the unborn.

We’re fully prepared to believe that some paper pusher pensioner at ASCAP overreached at some point in the distant past, just like paper pusher pensioners overreached with The MLC (another story, but a fine example of government run amok).  People at ASCAP no doubt deserved punishment in 1941 (but the offenders no doubt kept their salaries and their pensions unlike the songwriters whose catalogs they mishandled).  Instead of going after the individuals at ASCAP who broke the law, the government punished generations of songwriters, including those who were not even born yet  The fundamental question is should the later generations of songwriters be denied due process because of something some nebbish did in the 1940s?

We think not.  Yet what we have seen happen for generations is that all those who benefit from the administrative state created by the consent decrees want to keep it going.  Like the cockroaches who survive nuclear holocaust, the destructive effects for songwriters matters little to these people as long as they get their salaries, bonuses and pensions unlike the songwriters they purport to represent.  Because let’s remember—it wasn’t the songwriters who caused the problem.  And if you want to fix the anticompetitive problem, just make it the personal responsibility of whichever bureaucrat messed up, not the organization and certainly not the songwriters.  You won’t hear that idea from anyone on the DOJ’s panels.

In other words, whichever executive caused the problem in 1941 mishandled their responsibilities to the songwriters they were allowed to represent, and they are still doing it today.  Nothing much has changed.  And you know what else hasn’t changed?  They are still collecting their salaries, bonuses and pensions.  Songwriters still have the government’s boot on their throats with judges still trying to conjure up “market rates” where a free market doesn’t exist.  The free market hasn’t existed for so long and technology has changed so much you could say a free market never has existed and all of this is a kafka-esque charade.

The point being—the Justice Department is on the right track in reviewing the consent decrees to absolve songwriters of the original sin.  The push back DOJ is getting from the administrative state that has sprung up around the consent decrees should not be surprising.  The transaction costs to songwriters are astronomical given the full employment for lawyers, accountants and experts required by rate setting under the consent decrees, all of whom no doubt make more from administering the consent decrees that over 50% (at least) of songwriters will ever make from royalties under the consent decree rate setting.

Case in point from Zoë Keating who will be watching the DOJ panels:

Zoe ASCAP

It’s for reasons like this that we look askance at the PRO’s braying about their collections and distributions.  If they distribute $1 billion, we ask, how much did you cost the songwriters in hidden transaction costs for compliance (you know, like an unfunded mandate)?  How much money did you miss in your porous collection system?

Another example:  YouTube fails to pay songwriters for score or licensed music embedded in user-generated clips that the DMCA permits but does not provide guidance for (the related administrative state two aisles over in the “Safe Harbor” department).  This is the DOJ’s consent decree at work with the equally pernicious DMCA safe harbor.  Is anyone going to raise this issue?  I doubt it.  Why should they?  DOJ has the government’s boot on the songwriters neck and the administrative state has their boot on the songwriter’s wallet.

Will these issues come up on the DOJ panels?  Not from the line up of speakers that the lobbyists picked for the Antitrust Division’s public workshop.  Those speakers will present a very tightly messaged order of battle to preserve the administrative state, their jobs, their bonuses and their pensions.

Another case in point is the movie theater exception. Unlike most of the rest of the major economies, movie theaters in the US do not pay songwriters and composers public performance royalties.  This is the result of another ancient DOJ settlement that unfairly constrains income for composers and songwriters.

Let’s be very clear about movie theaters—what is about to happen due to the “COVID Consolidation” is that the streaming services are going to start buying theater chains.  It’s already started with Netfix buying the Paris Theater in New York and the Egyptian Theater in Los Angeles, and analysts are anticipating Amazon would tie movie theater tickets to its Amazon Prime subscriptions, using content as yet another loss leader that drives down value of music and movies. Once that happens the antitrust consent decrees will be protecting the monopolies from songwriters.  Does this seem completely ass-backwards to anyone else?

As the Society of Composers and Lyricists and the Songwriters Guild of America noted in their comments to DOJ:

[T]he principle “evidence” offered by the [National Association of Theater Owners in support of stiffing songwriters and composers] was, in fact, a forty-five year old case in which a mid-level employee of a third-party music licensing agent testified that she thought the forced combining of synchronization and movie theater performing rights was not an obstacle to her productivity. Citing CBS v. ASCAP, 400 F. Supp. 737, 760 (S.D.N.Y. 1975), the movie theater trade group stated:

In CBS, Albert Berman, managing director of the Harry Fox Agency, Inc. and Marion Mingle, the Fox employee who handled music rights, gave testimony describing the simple process they use to license both synchronization and performing rights for use in a theatrical motion picture—which can be completed roughly simultaneously most of the time. Mingle and her assistant were able to license “several hundred movies each year” this way.

Much has changed in the past half-century in regard to the licensing of musical works in films, but both SGA and SCL have little doubt one aspect of the process has not evolved in favor of music creators since the days of Ms. Mingle: that the Movie Theater Exemption has by default artificially relegated the value of US performing rights in motion pictures exhibited in US movie houses to at or near zero.

There is no good reason why the consent decrees ever needed to reach movie theaters as far as songwriters are concerned.  We see only one reason why anyone wants that travesty to continue.  As was widely reported at the time, streaming services—and theater owners—like Netflix got caught trying to jam buyouts of performance rights down the throats of composers:

At the end of October [2019], close to 90 composers and songwriters from around the world traveled to Budapest to discuss a contentious issue: streaming services’ efforts to upend how composers are compensated for their work.

Headlining the two-day International Council of Music Creators (CIAM) General Assembly was top Netflix music lawyer Carolyn Javier, who sought to defuse composers’ concerns over licensing contracts, known as buyouts, in which the streaming service pays them a one-time fee for all or most of the rights to their work, precluding them from receiving any backend royalties in the future. It has long been standard procedure for composers to be paid royalties for their compositions each time one is performed in a public setting: on the stage, at a bar, in a network TV or cable series, and now in audiovisual content streaming worldwide.

It’s obvious that if streaming services negotiate a buyout of performance rights for the music in their shows, it will apply across the board to the theaters they own.  This gives them added protection just in case the movie theater exception should go away.

We believe this is exactly the plan that these Big Tech companies have in mind.  Of course, if the DOJ had invited the CIAM—or its US affiliate Music Creators North America of which both the Society of Composers and Lyricists and the Songwriters Guild of America are members—then the Division might have had the opportunity to hear this side of the story directly from the songwriters and composers most directly affected by the shortcomings of the pensioners.

Motion picture and television composers are overrepresented in performance royalty earnings.  By any estimates, a significant chunk of performance royalties are earned by these craftsmen and they are directly affected—almost exclusively—by the movie theater exception which the PRO pensioneers blithely give away.  It is shocking that the DOJ has not included at least the Society of Composers and Lyricists in the not too public workshops, but it is not surprising—industry lobbyists have systematically excluded both the SCL and the Songwriters Guild of America from such hearings.  Whenever we see the lineup of songwriter groups present at the not too public workshops, we know exactly how they came to be selected.  It was not based on merit or representation.

You have to appreciate the irony of an anticompetitive suppression of voices by dominant forces being used to explore whether the consent decrees promote competition in the free market.

We can’t even have a free market of ideas to talk about the free market for songwriters.

 

 

 

by Dr. David C Lowery

An Open Letter to PEN Regarding Matt Bailey’s Anti-Artist, Anti-Copyright Blog

An open letter on PEN’s publication of Matt Bailey’s article containing anti-copyright positions.

Dear PEN–
As musical artists who have been forced to defend our livelihoods from Silicon Valley’s relentless attacks on our rights; and as supporters of PEN’s positive action in so many other areas; we were shocked that PEN chose to publish Matt Bailey’s “Three Big Discussions We Need to Have ASAP About AI and Social Media Moderation.”7/8/2020

Mr. Bailey’s discussion of free speech issues in policing the ideological content of online posts is welcome. His conflation of this issue with copyright infringement is irrational and harmful: the overwhelming majority of copyright-infringing files are 100% identical copies of commercially available music, film, or writing.
This is not the exercise of “free speech”, and the technology to regulate such infringement is 100% blind to the ideological content of the files.

The gutting of the market that has resulted from this mass infringement has chilled more free speech— simply by defunding and devaluing it— than any censor, human or AI, possibly could. [See this article by Neil Turkewitz].
The Tech corporate narrative represented in Mr. Bailey’s article– positing copyright as the enemy of free speech– is contrary to our own experience, the positions of virtually all major representative groups of musical artists*, filmmakers**, PEN’s other positions, and the interests of all writers.

We urge you to remove or edit Mr. Bailey’s anti-artist, anti-writer, anti-copyright article.

Sincerely, M Ribot

Co-signers,
Ben Bierman
Ken Hatfield

Olympia Kazi
David Lowery
John McCrea

*see the Music Community Response to the U.S. Copyright Offices Inquiry on Section 512 of the Digital Millennium Copyright Act.
**see Creative Future.

by Dr. David C Lowery

TikTok Gets an NMPA Special Out the Back Door as the FBI Comes in the Front Door

dogs-playing-poker
A Friend in Need

It’s becoming more apparent with each passing day that TikTok is about to get shut down by the U.S. Government for any one of a variety of crimes like it has been in India and other countries.  Which means that they are a perfect candidate for an “NMPA Special” which is where a handful of insiders decide on the terms and a pool of money is paid by the infringer to the NMPA for what amounts to a promise not to sue the infringer by the insiders and whatever useful idiots the NMPA can get to opt in to their deal.  (Or at least the deal they tell you about–and remember that some running dogs are more equal than others.)

Then some impenetrable claiming portal is set up for the average dog to “claim” a share of a revenue pool they had nothing to do with negotiating while being forced to give up any rights to sue (because the last thing that the NMPA wants is getting shown up again by a David Lowery, Melissa Ferrick, Randall Wixen or anyone represented by Richard Busch), and then the money just kind of disappears.  The amount of the pool is always so low it makes you wonder if that’s all there is, but in any event it has a distorting effect on the market place to drive down the rates paid to songwriters.

In a world where Cox Communications, a stupid but largely legitimate company, pays $1 billion for copyright infringement on a handful of copyrights, TikTok should pay $1 billion to get a meeting.  And if the FBI is right that TikTok is a front for the Chinese Communist Party, they could easily pay $1 billion for a meeting.  Anyone want to bet the over/under that the NMPA settlement is less than $1 billion?

How much the NMPA gets to keep out of the gross on the front end or the unclaimed after the claiming period expires is never disclosed and as you will see, the NMPA deal with TikTok, like all other NMPA deals, only applies to NMPA members.  So if you want to participate, you most likely will have to join the NMPA and pay a fee (sometimes based on market share).  And as came up in The MLC designation, The NMPA members may have a large market share of revenue but not necessarily on the number of songs.

Here’s the twist:  TikTok has no way to track what music has been used, much less account for it.   TikTok has no Content-ID type technology or control over what music is used so has no way to count or monitor what uses are made of which songs. So unless that gets fixed,  it’s a bit unclear exactly what you would be claiming from the NMPA’s claiming portal  Based on the NMPA’s YouTube and Spotify settlement portals, this one is almost certainly going to be absolute shite.

So what is the deal?  According to MusicAlly:

The deal “accounts for TikTok’s past use of musical works and sets up a forward-looking partnership” according to the announcement.

“This new partnership will give NMPA members the ability to opt-in to a licensing framework that allows them to benefit from their works included on TikTok and is effective retroactively as of May 1, 2020.”

The deal comes a day after TikTok announced a licensing deal with independent distributor Believe, and its TuneCore subsidiary.

“We are pleased to find a way forward with TikTok which benefits songwriters and publishers and offers them critical compensation for their work,” said NMPA boss David Israelite.

“Music is an important part of apps like TikTok which merge songs with expression and popularise new music while also giving new life to classic songs. This agreement respects the work of creators and gives them a way to be paid for their essential contributions to the platform.”

That might be true–but remember, there’s nothing in it for anyone who is not an NMPA member.  And a lot of people are not NMPA members regardless of what they tell judges.  So what happens to the great unwashed who are not NMPA members?  Unclear, but NMPA has likely set the market rate for TikTok settlements, so unless you plan on suing, they’ll just jam that deal down your throat.  Which works out well for TikTok.

But some lobbyist at TikTok has a friend when they are in need.

by thetrichordist

MLC Requires Songwriters to Polish HFA Data Turd

As a result of the passage of the 2018 Music Modernization act the federally designated Music Licensing Collective (MLC) will take over licensing, collecting and paying mechanical royalties from streaming services to songwriters January 2021.  Previously these duties and services were performed by a variety private companies.  One of the goals of the MMA was to streamline the process so that songwriters would benefit from increased efficiency and lower overhead. Incredibly the MLC appears to be establishing a system that will be less accurate and less efficient than the bad old system.  Essentially it is an additional $60 million dollar layer of bureaucracy sitting atop the old system with many of the old players now hired as “vendors.”

But it gets worse…

It has now become apparent that the MLC plan for building a global database of songs and songwriter/publisher splits is this:

  1. Ingest the shitty Harry Fox Agency data that was at the heart of the  many lawsuits against streaming services.
  2. Do NOT allow songwriters to view this data.
  3. Instead, ask songwriters to manually submit an Excel spreadsheet for each individual song. 
  4. The MLC will (manually?)check this data against their shitty HFA data.
  5. And then in the event of conflict…. <crickets>

How bad is the data?  I can only go by my catalog but nearly every song I co-wrote with another writer does not have the proper writer splits.  This despite the fact the I am an affiliated HFA writer/publisher and I gave them the splits when I signed up.  Look below.  My co-writers shares are listed as  “copyright control.”  What does that even mean? Where does that money go?

I think a fair reading of this is “MLC forces songwriters to fix bad data they are buying from HFA.”  So if songwriters are fixing the data, and the MLC is buying data from HFA, what exactly do all those highly paid music executives at the MLC do for the $60 Million?  Asteroid mining?

 

by Dr. David C Lowery

More Bullshit From Nashville Songwriters Association on Consent Decrees

A Nashville songwriter forwarded an email from the Nashville Songwriters Association International (NSAI). It concerns the oppressive and likely unconstitutional consent decrees that allow a single judge to (arbitrarily) set songwriter public performance organization royalties. For years the NSAI has claimed to oppose the consent decrees.  Now that the DOJ is seriously considering eliminating the decrees and thus let the market dictate the rates, the NSAI has suddenly decided they like the consent decrees!

“After months and months “reviewing” the ASCAP and BMI consent decrees, the U.S. Department of Justice Anti-Trust Division may be winding toward final recommendations on the antiquated decrees imposed during World War II! NSAI, for years an advocate for eliminating or making radical changes in the decrees, took a different position after Congress adopted the Music Modernization Act (MMA) in 2018. The most important changes we wanted to the decrees were made in the MMA. Those were changes as to how the ASCAP and BMI rate courts set digital performance royalties. Now that those judges are required to approximate market value royalties, NSAI has advocated NOT to completely eliminate the decrees.”

Most organizations that purport to represent artists and songwriters are run by folks who are not the sharpest tools in the shed. Thus we’ve seen some stunningly stupid decisions by similar organizations. But this is the stupidest ever.  Why do we need judges to approximate the market value of our songs? And how will they do that? There hasn’t been a free market for performance royalties since WWII.  If the DOJ is willing to let songwriter organizations out of the consent decrees, why don’t we just get out of the consent decrees and let a true “willing seller/willing buyer” market set rate? No approximation needed. Why would an organization that purports to represent songwriters essentially give away songwriters’ fundamental right to price their songs? I am dumbfounded.

To be fair NSAI has an answer. Sort of.

“We instead want to first see how the new rules impact songwriter royalty payments AND because of concern Congress might undo all of the gains from the MMA when they replace the decrees with new copyright laws.”

Oh, I see. Congress has readied some legislation to replace the ad hoc consent decrees with new copyright laws.  And these new laws *might* roll back gains made in the Music Modernization Act.

Bart Herbison is the Executive Director of the NSAI. I assume he wrote or approved the above email. This is so important I want to address him directly now.

Bart:

What the fuck are you smoking? There is no pending legislation. I asked everyone.  DUDE, YOU CAN’T JUST MAKE SHIT UP. This is the most misleading shit ever. What kind of EO of a membership organization makes shit up to scare their members into limiting their rights?

Alright. Maybe that’s too harsh. Maybe what you meant to say is that “eliminating the consent decrees will possibly cause broadcasters to introduce copyright legislation that would gut songwriter pay to benefit some of the most hated corporations in America.”

In the middle of a pandemic.

In the worst financial crisis since the great depression.

I’d like to see them try.

JFC man you are supposed to fight for songwriters. Yet you seem afraid of that fight?  This is your fucking job man. This is what you signed up for. If you can’t do that you need to give up your $275,000 a year salary.  Step aside.  Let a real songwriter advocate run the organization. Songwriters don’t need any more quislings.

 

by Dr. David C Lowery

Is The MLC Updating the HFA Database?

The MLC announced an aspirational tool for publishers to confirm whether the MLC’s data is correct for their songs.  Apparently this is planned to be a quality control check for song metadata that The MLC has already acquired. As far as we can tell, the tool doesn’t actually exist yet.

VaporwareHere’s the press release language:

For Music Publishers, Administrators and CMOs: Data Quality Initiative (DQI)
The MLC created the Data Quality Initiative (DQI) to provide a streamlined way for music publishers, administrators and foreign collective management organizations (CMOs) to compare large schedules of their musical works’ data against The MLC’s data. Through the DQI, The MLC will provide participants with reports that highlight the discrepancies between the two sets of data so that they can more easily address those discrepancies and improve the quality of The MLC’s data.

The MLC has begun working directly with a number of music publishers and administrators to on-board them into the initiative. The MLC is also working with software vendors to help them enhance their platforms to enable users of their systems to participate in the initiative. The MLC looks forward to working with other music publishers, administrators, CMOs and software system vendors interested in participating in The MLC’s Data Quality Initiative.

“One of the biggest and most time-consuming challenges for music publishers, administrators and CMOs is checking the accuracy of their musical works’ data,” said Richard Thompson, CIO of The MLC. “We launched the Data Quality Initiative to help those parties increase the efficiency and effectiveness of this process. Participants in the initiative will be able to see where their musical works data does not match The MLC’s data, so that they can then take the necessary corrective action.”

Of course, The MLC has yet to permit songwriters (or anyone for that matter) to register their songs with The MLC at least not publicly.  Neither have they given anyone access to whatever data they actually have ingested–and still won’t with the DQI tools. When you use the DQI tool, you sit outside The MLC’s database and they give you “reports” so you may take “the necessary corrective action”.  At your own expense, of course.  You know, “Play Your Part On Your Dime to Keep Us Relevant.”

So if the goal of the Data Quality Initiative is for “The MLC [to] provide participants with reports that highlight the discrepancies between the two sets of data so that they can more easily address those discrepancies and improve the quality of The MLC’s data” we have to ask how did The MLC come to have any data to check for quality control in the first place?

Chances are pretty good that the source of The MLC’s data set is the Harry Fox Agency–if they’ve even bothered to copy the HFA data into The MLC’s database.  (One reason they send you a “report” is so the source of that report is not disclosed as if it were just the HFA database being queried, it might raise some hackles among songwriters and especially the DLC who is paying millions for the whole show.)

As has been noted, The MLC’s Richard Thompson announced that The MLC was working with HFA since The MLC was first designated by the Copyright Office as the MLC. (even before they announced that HFA was their vendor)  This is the HFA that services Spotify.  Spotify has been sued…ahem…a number of times for failures to license songs in historic litigation that led to their latest get-out-of-jail-free goal-post-moving exercise also known as the Music Modernization Act.  In fact, HFA is currently being sued alongside Spotify by Eminem’s publishers for all sorts of nasty things (which have yet to be proved).  But make no mistake, HFA was picked as best of breed by everyone’s favorite MLC, The MLC.

So what The MLC is really saying here is that they want everyone to take the time to check your own data against the HFA database and then correct it.  And who wants to bet that all those corrections–which could be a vast number of corrections and song-share updates–will end up back at HFA for HFA to use as it chooses (or its Rumblefish affiliate).

Play Your Part for HFA

But wait, there’s more.  Don’t forget:  The reason for this exercise in data cleaning is to “improve the quality of The MLC’s data“.  Why do you care about the quality of The MLC’s data? Very simple.  The government makes you do it.  What could be worse than a compulsory license?  A compulsory license with a safe harbor for massive infringers like Spotify and an industry-wide market share black box controlled by the for-profit companies that most benefit from the market share black box.

So what The MLC is really saying is “play your part” to “improve the quality of The MLC’s data” or we will take your money and there’s sweet F-all that you can do about it.  In the middle of a global pandemic.  The truth doesn’t read quite so well, right?  Oh, and by the way–you get to pay the costs of this data clean up job yourself even though it’s for the benefit of The MLC.  And why are you compelled to cover those costs?

Because they’ll take your compulsory royalties if you don’t.  And given the way these people work, maybe even if you do.  How would you ever know?

But wait, there’s still more.  Remember that the Eminem publisher’s case is about Spotify’s failure to match properly which is a condition of the MMA safe harbor that somebody decided was a good idea for the rest of us.  Let’s say that those publishers are wrong and that the services have actually been matching like crazy to keep their safe harbor (albeit in the background because the sainted MMA does not have any oversight or transparency about matching).

We don’t believe this, of course.  But let’s just say that they’re wrong for argument’s sake.

If The MLC got their data from the services instead of from HFA, then presumably all that matching being done by the biggest tech companies in human history would probably result in a greater match rate than HFA–particularly since HFA has been at the heart of many, many lawsuits against their clients for failing to match.  Let’s face it–many, many publishers have already burned a huge amount of energy fixing Google’s weak Content Management System alone.  Want to bet that CMS has a higher match rate than HFA?

So we don’t think that the song data that is being checked so you can “Play Your Part On Your Dime” is from anywhere but HFA.  We also think that if no one stops them, The MLC will simply hand over all those corrections to HFA for use in its own database for unrelated clients, such as for bundled performance licenses.  And who benefits from that besides HFA?  If you said the publishers with direct deals on services that engage HFA or Rumblefish to handle their licensing,  you probably would not be too far wrong.

Remember this?

Facebook Inc. has engaged HFA’s Rumblefish services to offer to publishers the opportunity to enter into a direct license agreement with Facebook for Facebook, Instagram, Messenger and Oculus. This opportunity is available to all publishers.

This license agreement will grant Facebook Inc. reproduction, display, synchronization, and public performance rights. As an HFA Affiliate you have already authorized HFA to act on behalf of your publisher with respect to licensing offers for the rights mentioned above other than performance, which means we need your written permission to accept this offer on your behalf.

So be sure to fire up that credit card and “Play Your Part”.  And be quick about it.  Your betters are waiting.

by thetrichordist

YouTube is (Still) Loaded with White Nationalist and Neo-Nazi Music, But no Advertiser Boycott? #StopHateForProfit

By now you are probably aware of the campaign to get brands to stop advertising on Facebook because of the prevalence of hate speech. The campaign has been endorsed by a number of civil rights organizations including The NAACP and Anti-Defamation League.  The campaign owes much of it’s success to Sleeping Giants (twitter handle @slpng_giants) a largely anonymous social media activist group.  Sleeping Giants was the force behind successful advertiser boycotts of Breitbart and Fox News.  Facebook is now their biggest trophy.

Over the last decade, my fellow bloggers at the Trichordist have documented the prevalence of white nationalist and neo-nazi music on YouTube.  Here are just a few examples:

2013

https://thetrichordist.com/2013/11/07/ytma-artists-can-help-clean-up-youtube-an-open-letter-to-jason-schwartzman-lady-gaga-spike-jonze-m-i-a-arcade-fire-and-macklemore/

2014

https://thetrichordist.com/2014/04/15/youtube-still-serving-ads-on-hate-rock-videos/

https://thetrichordist.com/2014/11/13/will-the-new-youtube-streaming-service-feature-all-the-hate-rock-currently-featured-on-youtube/

2015

https://thetrichordist.com/2015/07/16/advertisers-how-is-youtube-any-different-than-reddit/

2017

https://thetrichordist.com/2017/02/15/forget-pewdiepie-here-are-100-hate-rock-bands-that-youtube-still-hosts/

YouTube advertisers have periodically reacted to these reports by pulling advertising.  But YouTube continues to be loaded with hate rock.  You can verify this yourself by checking the Southern Poverty Law Center list of white nationalist bands and then searching on YouTube.  Here are some screenshots from my most recent search.

Fortress, Kill Baby Kill, The Bully Boys, Skrewdriver, Final War, etc.  The gang is ALL there!  And not all these videos were “user-generated content.” Many of these were official uploads by music distributors like CD Baby (Bully Boys).  And of course, many of these videos were monetized by YouTube.

So if advertisers are concerned that their ads will end up next to hate speech shouldn’t the #StopHateForProfit boycott also include YouTube? Then again maybe some advertisers just don’t care? (See below).

 

by Trichordist Editor