The Trichordist

Go recuse yourself.  Renata Hesse former Google lawyer and Principle Deputy Assistant Attorney General for Criminal and Civil Operations reportedly rammed through the 100% licensing change to BMI/ASCAP consent decrees. 

Last week the Department of Justice Anti-Trust division announced a further tightening of the antiquated and likely unconstitutional consent decrees that govern songwriter organizations.  Never mind that the 1941 consent decrees were put in place when most radio stations were owned by individuals and ASCAP was pretty much the only game in town.  Now we have massive media consolidation in the broadcast industry, previously unimagined monopolies like Google/YouTube and at least 5 PROs.   Yet the consent decrees are backwards now. They are still pointed at songwriters but benefit dominant firms like Google/YouTube,  Clear Channel, Pandora and Spotify. It’s insane.

For this reason recent talk had been of loosening or even eliminating the 70+ year old consent decrees.  That is why the entire songwriting community was shocked when the DOJ led by former Google lawyer Renata Hesse rammed through a tightening of the consent decrees that govern songwriters. In particular the DOJ has made a change to the consent decrees that would allow a single PRO to license an entire song on behalf of other co-writers even if they are represented by a different PRO which is not under the consent decree.  While this is a seemingly small change the unintended consequences are huge.  Among the many problems with this:

1. May void thousands of private co-administration contracts that cover millions of songs.
2. May void international agreements between US PROs and foreign government chartered PROs.
3. May violate due process of thousands of songwriters not subject to the consent decrees.
4. Creates an effective statutory license without action by legislative branch.
5. Makes a sham of separate proceedings and  rate courts for BMI and ASCAP.
6. Makes music licensing process less efficient likely increasing costs to consumers, songwriters or both.
7. Creates appearance of impropriety for DOJ as this favors Google.
8. Reinforces Google/YouTube monopsony.

We will go further into each of these later this week, but for now we want to just concentrate on the very last one, the Google YouTube monopsony.

If you aren’t familiar with the term monopsony, a monopsony exists when a  dominant market player like Wal-Mart or YouTube is able to reduce payments to suppliers below the price required to produce a good.  Eventually this harms consumers because it creates a race to the bottom eliminating all but a few suppliers.  Unfortunately it is often seen as a “neat trick” by monopolists because the way our antitrust laws have been interpreted for the last couple decades,  anti-competitive behavior is okay if it results in lower prices to consumers. No need to “bust a trust” in this case. 

 I’m pretty sure this is not what Teddy Roosevelt had in mind. 

Under this interpretation of antitrust law the Department of Justice absurdly favors music consumers over music producers.  They invent a “consumer right” to cheap music and favor that over a songwriter’s right to participate in a free market and earn a fair return on songs they create.  You see how that doesn’t really hold up? What happens to consumers when absurdly low royalties discourage songwriters from writing new songs?  Doesnt fewer songwriters and fewer songs mean less competition? 

In order to save the market the DOJ has decided to destroy it. Welcome to the dumbed-down American dystopia envisioned by Mike Judge in Idiocracy.

So specifically how does this 100% licensing change benefit a monopsony like Google? Let’s create a hypothetical example.

Say you are a big time artist manager.  As a manager you grow tired of the lousy performance royalties that your artist/songwriters are receiving from YouTube and other digital services.   When you find out that it’s not possible to withhold music from the lousy paying services because your songwriters’ PROs (ASCAP and BMI) are under antiquated 70 year old  DOJ consent decrees, you decide to start a new PRO called Worldwide Music Rights (WMR).

Now WMR  is not under the DOJ consent decrees, so you go ahead and start negotiating a new deal with service like YouTube.   Obviously YouTube is not happy about paying a potentially higher price, so they invoke the DOJ 100% licensing deal,  which forces ASCAP and BMI to issue licenses for all the songs that your writers have co-written with ASCAP and BMI writers.  Since most big hits are co-written by songwriting teams, inevitably these teams include BMI and ASCAP writers.  Bam! You’re back under the consent decrees. Further since the consent decrees set BMI and ASCAP royalties below market rates this effectively sets the WMR royalty rate.  Even though WMR is not bound by the consent decree.  You see how beneficial this would be to a company like YouTube.  They really don’t have to negotiate with WMR.  Mission accomplished anti-trust division! Market pricing eliminated!

Of course this is all hypothet-,,, Excuse me?… Sorry say that again?… What? This actually happened? Super manager Irving Azoff started a new PRO  called GMR and tried to negotiate better rates for his songwriters with YouTube?!  Wow!  I did not know this!  What a funny coincidence!

Gee I hope that Renata Hesse didn’t know this either! Or communicate with her former client.  I mean cause you could get in a lot of trouble for doing something like that.   I have to say it is pretty weird that she even went ahead with this 100% licensing proposal.  I mean it’s not like anyone on either side of the song licensing market was clamoring for 100% licensing.   The DOJ conducted a public consultation and even the US Copyright Office came out against this proposal. Members of the house of representatives weighed in against this proposal as well.

Well, I guess Renata Hesse is really smart and knows what is best for all of us.  Smarter than anyone that works in the music business or the Copyright Office.   After all she has a J.D. from U.C. Berkeley.  People like me we are just dumb songwriters.  What do we know?  I’m sure this elite super educated lawyer will take real good care of us.  We’ll just go back to shucking  this corn.

 

 

 

 

 

 

 

 

The official bio for Justice Department official supervising the ASCAP/BMI consent decree review leaves out her representation of Google. Now why might that be?

via What’s Missing in DOJ Songwriter Antagonist’s Official Bio? — Artist Rights Watch

The new 100% licensing rule from the DOJ would force any ASCAP or BMI co-writers to license Pharrell’s work to YouTube.

As  a result I find it extremely curious that the DOJ official that has  apparently spearheaded the drive to change the rules once worked for Google.   And why the fuck is the DOJ even involved in music licensing anyway?  Shouldn’t they be investigating ISIS or something?

If I were Pharrell Williams I’d ask Michael Horowitz the Inspector General of the Department of Justice to look into this matter. Not saying there’s necessarily anything there but it’s not a good look for an already embattled DOJ.  Think of it as a confidence building measure. 

https://oig.justice.gov/about/meet-ig.htm

 

“The American Sugar Refining Company” one of the many 1890s themed Department of Justice Antitrust Division employee bands.  Sociologists have attributed the phenomenon to “proxy parental juvenile rebellion” whereby staff lawyers “rebel” against the “parental” tenets of antitrust law by embracing the 1890s when trusts like American Sugar Company were untouchable. 

An 1890’s craze has been sweeping the Department of Justice antitrust division.  Employees of the formerly respected part of the executive branch have recently taken to growing enormous mustaches, riding bicycles with large front wheels and using antitrust law to enrich and further entrench existing trusts like Google.

“It was a really cool time.  The Supreme Court in 1895 used a law intended to bust trusts (The Sherman Act) to actually go after labor unions” said a lawyer in litigation section III.  “I mean this is exactly what we are doing with songwriter performing rights organizations.”

“This is like the golden age of antitrust law, before The Clayton Act made the law work as intended” offered another lawyer from section II. “If these disgusting songwriters didn’t want the boot of the Department of Justice on their throats they should have done something different with their lives.”

When this reporter asked for clarification on what other things songwriters could have done with their lives, the lawyers suggested alternative careers like  “click fraud,” “mass copyright infringement” or “start a monopolist search engine/search advertising firm.”

“Yeah we never go after that kind of stuff” a young staffer offered.

The craze traces it roots back to the rehiring of Renata Hesse at the DOJ in 2011.  During a brief revolving door sabbatical from DOJ Hesse apparently worked in private practice (Ka-ching!) to defend Google from DOJ concerns that the Google-Yahoo search advertising lockup was anti-competitive.  Hesse omits this detail from her DOJ bio.

Hesse refused to comment on the record but another DOJ staffer told us “We are elite lawyers from the most elite institutions in the world, Harvard, Yale, UC Berkeley.  No one should expect us to relate to the little guy, those we are charged with protecting. No one should expect us to have morals, ethics, humility or common sense.”

 

§ 8(a)The flag should never be displayed with the union down, except as a signal of dire distress in instances of extreme danger to life or property.

The federal government through the combination of “temporary” 70 year old consent decrees and compulsory licenses has drastically limited songwriters rights and effectively collectivized all songs.  A few songwriters until recently had managed to escape these overbearing limitations on rights by joining PROs other than BMI and ASCAP.  But last week a former Google lawyer at the DOJ anti-trust division against the recommendation of the US Copyright Office rammed through a 100% licensing rule that effectively brings the last of the “free” songwriters under the consent decree.

There was no due process.

There were no new laws passed.

The last free songwriters did not consent to having their constitutional rights limited.

This was done apparently at the whim of a single unelected federal bureaucrat.   All songwriters are now subject to the consent decrees.  This is effectively a bill of attainder against all songwriters.   These kinds of governmental actions upset our founding fathers greatly.  For this reason they expressly forbid the practice under  Article One Section 9 of the US Constitution.

Are songwriters some sort of existential threat to our way of life here in the US?   Doesn’t it seems like the Department of Justice has more important things to do? Surely making it cheap and easy for a few politically connected corporations to license music should not be at the top of the list.

++++++++++++++++++++++++++++++++++++++++++++++++++

As a result of this action the  federal government now effectively fixes prices and compels ALL songwriters to license for the following uses:

AM/FM Radio

Television Broadcast

Public Radio

Public Television

Satellite Radio

Cable TV

Digital Music Channels

Websites

Non-Interactive Streaming (ex Pandora etc)

Interactive Streaming (ex Spotify)

YouTube/Online Video

Netflix, HBOGO etc

Digital Downloads (Google Play, iTunes Store)

CDs

Vinyl

Cassettes

Cover songs

Ringtones

Ringbacks

Mastertones

Public performance in venues

Karaoke

Music in stores and restaurants

Stadiums

Sporting Events

Jukeboxes

Music onboard commercial aircraft

etc etc

The only significant free market exception left:

Songwriters are still free to name their price for the initial “sync” fee for use of a song in TV, film or commercial.  But all subsequent royalties from broadcast are set by feds.   Not surprisingly songwriters are paid reasonably well for “sync” uses.

 

ASCAP’s CEO tells songwriters that ASCAP strongly disagrees with the new government rule that forces PROs to adopt 100% licensing. None of the parties to the decrees raised the issue. “We believe that this approach will only create confusion, chaos and instability, harming both music creators and users. Even more troubling is the fact that the government chose this path, despite the fact that more than 15,000 songwriters and composers, as well as the US Copyright Office, members of Congress and others in the industry, registered their strong opposition to 100% licensing with the DOJ.”

via ASCAP CEO Beth Matthews Responds to the Recent Proposal from the US Department of Justice — Artist Rights Watch

The head of the DOJ Antitrust Division is a former Google lawyer–so DOJ ruling against songwriters on 100% licensing to Google’s benefit should come as no surprise.

via Billboard: Google’s Justice Department out to Destroy PROs — Artist Rights Watch

Whether you are shouting “tax the rich” into a megaphone or urging mass copyright infringement against he MLK estate it’s still important to wear your pearls!  

“Progressive” Zephyr Teachout the democratic primary victor in NY-19 Congressional district is director of an organization that urged and continues to urge mass copyright infringement directed at the MLK estate.  Only in a 90% white district in upstate NY could someone like this be considered a “progressive.”

We have been covering this story here at the Trichordist for over a month.   We have tweeted her links.  We have emailed the Zephyr Teachout campaign.   Other organizations including the local American Federation of Musicians have tried to get her to respond on this and other copyright issues.  No response.

As of 11:04 pm  June 28th the webpage urging mass copyright infringement is still live.  We can only conclude that Teachout has “dug in” and she sees nothing wrong with this.  Really?  That’s where she’s gonna take a stand?   Is that what it means to be a progressive now days?  No thanks.

Zephyr TeachOut is not who she claims to be.  Don’t say we didn’t warn you. Read our comprehensive coverage of her long and sordid history with astroturf groups,SuperPACs  and self-serving copyright infringement here:

https://thetrichordist.com/2016/05/24/progressive-candidates-fail-artists-zephyr-teachout-ny-19-vs-woodstock-ny/

Teachout’s “Internet freedom day” website at 11:04pm EDT June 28th.  Worlds first civil disobedience campaign against a civil rights icon! Still live. Now that’s what I call Progressive!

You think Brexit was stupid? New York -19 Dems show the Brits how it’s done with a Zephyxit!

This is the “About Us” page when we started writing about Teachout.

In the last few days the page has been changed to this.  Hey kids it’s a game of “where in the world is Zephyr Teachout?”

Oh here she is!  Right here on their 2015 tax return!

 

 

 

 

 

 

 

Labels need to be coming to grips with a succession plan when YouTube negotiations fail to satisfy artist concerns–Apple and Spotify are logical choices.

by Chris Castle via The Great Artist Revolt: Are Apple Music and Spotify a Solution to a Post-YouTube Reality? — Music Tech Solutions

By The Time We Get To Woodstock….

This Tuesday, Zephyr Teachout, director of the anti-artist FFTF (Fight For The Future)’s 501c3, is running in the Democratic primary in NY’s 19th congressional district (Hudson Valley, including Woodstock)

Although Teachout  is running as a progressive, and is indeed progressive on many issues, the FFTF is about as regressive on artists rights/copyright as possible.

See:

http://m.registerstar.com/opinion/letters_to_the_editor/article_d6f609cc-34a4-11e6-927b-0bd4ad13e953.html?mode=jqm

https://thetrichordist.com/2016/05/24/progressive-candidates-fail-artists-zephyr-teachout-ny-19-vs-woodstock-ny/

https://thetrichordist.com/2016/04/02/fight-for-the-future-of-corporate-astroturf-ripping-off-creators/

After unsuccessfully trying to get Teachout to clarify  her relation to the anti-artist positions of FFTF,  NY based “Musicians Action group” [MA.g] activists sounded the alarm through a mass emailing to  Hudson Valley musicians:

“Many of us are democrats who share Teachout’s progressive views on many issues. But creators’ families are Working Families, too, and copyright is how we get paid.  So we’re asking Zephyr Teachout: Which Side Are You On?”. The email asked everyone  to send  Teachout 4 questions (see below).

According to MA.g spokesperson Marc Ribot, “the response from musicians/creators has been extremely positive.

Legendary Jazz drummer and Hudson Valley resident Jack DeJohnette copied us on the letter he and his wife Lydia sent Teachout, along with MA.g’s 4 questions.   We think Jack and Lydia’s eloquent letter speaks for MANY,  in Hudson Valley and beyond.”

Jack and Lydia DeJohnette Letter to Teachout

Dear Ms Teachout,

My wife and I have been following you since your run for governor with interest.  We are progressives and along with the rest of us are disturbed by a lot of what we perceive as self-serving politicians who seem to have forgotten who puts them in office and who they should be serving. 

You have impressed us on many issues, however, the attached letter speaks to issues that are directly impacting our lives as artists.

The Hudson Valley has according to Mike Hein,county executive,  the largest group of artists per capita in the USA living in it.  My wife and I have lived here over 40 years and raised our family here.  It disturbs me that someone who seems to be running in support of the people is not further tuned in to the needs of us artists, who ultimately might be your constituents.

Since downloads and YouTube started my  recorded music royalties have declined by over 90%, I am all over YouTube, everyone but me gets an income from this.

The internet has virtually destroyed my royalty income, from radio to illegal downloads.  I am not a famous rock star who can get heavy duty lawyers fighting for me.  I am a jazz musician, we have never been represented in the ‘big picture’, our sales are considered paltry by the industry. 

Technology is in advance of regulations, our only hope is that our politicians take up the cause for us and work to bring in legislation that protects us, we hope you will become that champion.  If you support us in this issue, we will consider supporting you further.  Please respond to the four questions posed in the attachment.

I am a senior now and at one time in the past I had expected to retire with some royalty income as a back up, unfortunately that is no longer. As the corporations behind the music industry are getting bigger and bigger.

We look forward to hearing from you,

Sincerely,

Jack & Lydia DeJohnette

Four Questions for Zephyr Teachout Candidate US House of Representatives Democratic Primary NY-19

1. Do you personally support the anti-artist, anti-copyright agenda of Fight For The Future, where you served as Director of the Education Fund? If so, please explain why you hold that position. If not, please explain how your views differ from the messages of that organization.

 

2. Do you recognize that mass, online copyright infringement causes direct harm to people like me? As my prospective representative, will you fight for my ability to support myself and my family with my creative work?

 

3. You’re running on a message that is very important to democrats – holding corporations accountable and getting big money out of politics.  Can you say without equivocation that Fight For The Future reflects these values?

 

4. Do you support Jerrold Nadler’s Fair Play Fair Pay bill, which would bring the US into conformity with the rest of the free industrialized world by paying artists for the commercial, terrestrial radio broadcast of their work (and put tens of millions in foreign royalties now being withheld due to the lack of US reciprocity into the pockets of US working artists)?