The American Music Fairness Act: Will Justice Cross the Finish Line

The American Music Fairness Act is still alive in the 119th Congress in the post-Labor Day political season, and with Congress heading toward the final stretch of the year, it is worth remembering both what the bill actually does and why it matters.

The basic proposition behind AMFA is remarkably simple: when terrestrial radio uses a sound recording to make money, the people who made the recording should be paid. That is not currently the law in the United States, and that’s what the #I Respect Music campaign is all about.

Songwriters and music publishers receive public-performance royalties when AM/FM radio plays a song. But the recording artists, background singers, session musicians and owners of the sound recording receive nothing for the terrestrial performance of that recording. Digital radio services, by contrast, already pay sound-recording performance royalties.

AMFA—S. 326 in the Senate and H.R. 861 in the House—would finally close that anomaly by extending the Section 106(6) sound-recording performance right to terrestrial audio transmissions and bringing AM/FM broadcasts within the Section 114 statutory licensing system.

This Is Not a Small-Radio-Killer Bill

One of the more persistent arguments against AMFA is that a new royalty would threaten small and community broadcasters. Congress has addressed that concern rather directly.

Under S. 326, a qualifying station with less than $100,000 in annual revenue would pay $10 per year. Qualifying public broadcasters with revenues between $100,000 and $1.5 million would pay $100 per year, while other qualifying stations in that range would pay $500. Those protections are limited to genuinely smaller operations; among other requirements, the station’s owner and affiliated entities must have aggregate revenues below $10 million. Let’s be real; that’s a fair deal for small broadcasters, come on.

For everyone else, the Copyright Royalty Judges would establish the rate. And Congress expressly tells the judges that they can consider radio’s much-invoked “exposure” value when determining that rate. (I’m so sure they’ll net out the indie payments, but hush my mouth.)

In other words, “radio promotes records” is not ignored by AMFA. It becomes an economic proposition that can be tested in an actual rate-setting proceeding rather than a vague slogan chanted by NAB lobbyists in sack cloth and ashes justifying a permanent entitlement for large broadcasters to use recordings for free.

And Artists Actually Get Paid

There is another important feature of AMFA that deserves considerably more attention. The bill plugs a potential direct-licensing loophole. If a copyright owner directly licenses transmissions that otherwise could have been made under the Section 114 statutory license, the broadcaster doesn’t get to use that deal to contract the performers out of their statutory share. The transmitting entity must pay 50 percent of the applicable direct-license royalties to SoundExchange (the collective Congress designated to distribute Section 114 royalties), which then distributes the money according to the statutory performer allocations.

That protection is important. It means AMFA isn’t merely creating another revenue stream payable to record companies with the hope that something eventually trickles through an artist’s recording agreement around recoupment in the royalty waterfall. The legislation deliberately preserves a statutory payment path for featured and nonfeatured performers.

That’s an important piece of artist protection and one of the better features of the bill.

The Whip Count

The reality is that AMFA is not sitting on the President’s desk. Neither chamber has reported the bill so far, and that’s the reality in the cold light of dawn. But— look at the Senate sponsorship.

S. 326 is led by Sen. Marsha Blackburn (R-TN) and now has Thom Tillis (R-NC), Bill Hagerty (R-TN), Alex Padilla (D-CA), Cory Booker (D-NJ), and Adam Schiff (D-CA) aboard. That is a 3–3 Republican/Democratic lineup, and importantly, Tillis chairs the Senate Judiciary Intellectual Property Subcommittee while Schiff is its ranking member.

That’s only six senators including the sponsor, so this is certainly not a 60-vote whip count. But six names don’t tell the whole story. Having the chairman and ranking member of the relevant subcommittee supporting the legislation is rather different from having six random cosponsors.

The Senate also did something important in December: it held an actual IP Subcommittee hearing on terrestrial performance rights, with Gene Simmons and SoundExchange President Michael Huppe making the case for performers and broadcasters presenting the opposing view.  And when Gene Simmons makes the case before Congress (“the word ‘if’ is for losers….”) and in his Washington Post op-ed, that’s a sight to behold and is must-see TV if you haven’t watched it.

AMFA support in the House of Representatives is also bipartisan. H.R. 861 is sponsored by Rep. Darrell Issa (R-CA), with support that crosses the aisle, including our long-time supporters Jerry Nadler and Ted Lieu. The House bill has accumulated additional cosponsors since introduction, although it likewise has not yet been reported from Judiciary.

So call the whip count what it is: not enough yet, but unusually well positioned institutionally for a music bill that hasn’t moved through committee.  And let’s be clear—fighting the National Association of Broadcasters is tough work, right up there with the Augean Stables and Sisyphus.  Although closer to the Stables in our opinion.

Don’t Rule Out the Lame Duck

That brings us to the calendar. There isn’t much legislative runway remaining in the 119th Congress, and AMFA still faces formidable opposition from the broadcast lobby. A conventional committee-to-floor path is getting increasingly difficult. But Congress will return after the November elections, and that is where things could get interesting before January 3, 2027 when unpasted bills die.

Music legislation has a history of moving when bipartisan agreement finally intersects with a legislative vehicle. The Music Modernization Act itself ultimately became a package containing several pieces of music legislation and passed with overwhelming bipartisan support.

AMFA now has something it did not have at the beginning of this Congress: a Senate hearing, bipartisan support from the leadership of the relevant IP subcommittee, bipartisan sponsorship in both chambers, and a legislative record establishing both the case for paying performers and the protections afforded small broadcasters.

While that doesn’t guarantee anything, it does make AMFA a plausible candidate for a lame-duck legislative vehicle if the right copyright, intellectual-property or broader year-end package starts moving.  Stranger things have happened.

And this is one of those issues where Congress has been “studying” the problem for a very long time. As SoundExchange CEO Mike Huppe reminded the Senate last December, the Senate Judiciary Committee actually reported the predecessor Performance Rights Act in 2009. It never reached the floor.

Seventeen years later, the underlying inequity is still the law:  American radio broadcasters can build a commercial business around recorded performances without paying the performers for those performances. Digital services pay. Broadcasters in most other developed music markets pay. American terrestrial radio does not.  Artists still die of exposure.

The American Music Fairness Act would finally change that.

Six Senate sponsors isn’t 60 votes. But with Blackburn, Tillis, Hagerty, Padilla, Booker and Schiff already aboard—and Tillis and Schiff occupying the two key positions on the IP Subcommittee—there may be enough bipartisan infrastructure here to keep watching very closely as Congress heads toward the lame duck.

Sometimes the last few weeks of a Congress are when supporters of legislation that has been waiting years finally ride Justice across the finish line.

9/18/25: Save the Date! @ArtistRights Institute and American University Kogod School to host Artist Rights Roundtable on AI and Copyright Sept. 18 in Washington, DC

🎙️ Artist Rights Roundtable on AI and Copyright:  Coffee with Humans and the Machines            

📍 Butler Board Room, Bender Arena, American University, 4400 Massachusetts Ave NW, Washington D.C. 20016 | 🗓️ September 18, 2025 | 🕗 8:00 a.m. – 12:00 noon

Hosted by the Artist Rights Institute & American University’s Kogod School of Business, Entertainment Business Program

🔹 Overview:

Join the Artist Rights Institute (ARI) and Kogod’s Entertainment Business Program for a timely morning roundtable on AI and copyright from the artist’s perspective. We’ll explore how emerging artificial intelligence technologies challenge authorship, licensing, and the creative economy — and what courts, lawmakers, and creators are doing in response.

☕ Coffee served starting at 8:00 a.m.
🧠 Program begins at 8:50 a.m.
🕛 Concludes by 12:00 noon — you’ll be free to have lunch with your clone.

🗂️ Program:

8:00–8:50 a.m. – Registration and Coffee

8:50–9:00 a.m. – Introductory Remarks by Dean David Marchick and ARI Director Chris Castle

9:00–10:00 a.m. – Topic 1: AI Provenance Is the Cornerstone of Legitimate AI Licensing:

Speakers:
Dr. Moiya McTier Human Artistry Campaign
Ryan Lehnning, Assistant General Counsel, International at SoundExchange
The Chatbot
Moderator Chris Castle, Artist Rights Institute

10:10–10:30 a.m. – Briefing: Current AI Litigation, Kevin Madigan, Senior Vice President, Policy and Government Affairs, Copyright Alliance

10:30–11:30 a.m. – Topic 2: Ask the AI: Can Integrity and Innovation Survive Without Artist Consent?

Speakers:
Erin McAnally, Executive Director, Songwriters of North America
Dr. Richard James Burgess, CEO A2IM
Dr. David C. Lowery, Terry College of Business, University of Georgia.

Moderator: Linda Bloss Baum, Director Business and Entertainment Program, Kogod School of Business

11:40–12:00 p.m. – Briefing: US and International AI Legislation

🎟️ Admission:

Free and open to the public. Registration required at Eventbrite. Seating is limited.

🔗 Stay Updated:

Watch Eventbrite, this space and visit ArtistRightsInstitute.org for updates and speaker announcements.

@wordsbykristin: Legal Fights, Transparency & Neutrality: DiMA’s CEO On Improvements Streamers Suggest for the MLC

Kristin Robinson makes another important contribution to the artist rights conversation with her interview of Graham Davies, the new head of the Digital Media Association. Graham comes to DiMA from a background in the artist rights movement at our friends the Ivors Academy in the UK. We have high hopes for Graham who brings his intellect to clean up a long, long line of mediocrity at the DiMA leadership who are from Washington and here to help.

Kristin’s interview highlights DiMA’s recent filings in The Reup–the redesignation of the MLC by the Copyright Office that we’ve highlighted on Trichordist. He also has some well thought out analysis on how the MLC is not HFA, however similar the two may seem in practice.

This is an important interview and you can find it on Billboard (subscription required).

Here’s an example of Graham’s insight:

Do you think a re-designation every five years is not enough on its own?

I think it’ll be interesting to see what the re-designation process brings forward from the Copyright Office. Maybe the Copyright Office leans in on governance and says, “We’ve heard enough, and we can come forward with ideas.” But the re-designation process is a different thing than a governance review, which would bring in a special team to actually dig into governance-related issues and bring forward recommendations and proposals that could then be implemented. It would be something more specific and something the MLC could just do. You wouldn’t need the Copyright Office to sponsor it, though they could if they wanted to.

The Revenge of the Internet Archive: Google and the Metashills Lead the Long March Through State Houses to Weaken Copyright for the Metaverse

By Chris Castle [This post first appeared on MusicTechPolicy]

[Trichordist readers will not be surprised to know that Artist Enemy No. 1 Senator Ron Wyden (aka Senator Data Center) is leading the charge of the insane bagmen to impose a compulsory license on any content that gets in the way of Facebook, Google and the metaverse.]

Google has led a long march through the institutions to weaken copyright by propping up proxy warriors who mean to take us in a rush. That effort has now come to a head in Maryland with a bizarre statute that got through the Maryland legislature Tommy Carcetti-style–a state law compulsory license for ebooks. (Maryland Education Code §§ 23-701, 23-702).

The Maryland law is wrong for so many reasons, but is also an unconstitutional usurpation of the federal government’s exclusive domain over copyright. This is a solution in search of a problem–ebooks are already routinely licensed to libraries under voluntary agreements at a market rate. The legislation would allow the State of Maryland to force the authors to license but the state would set the rates. Songwriters can tell you this is a nightmarish process at the federal level–and by the way songwriters, you’re next, just see the fever dream of compulsory licenses for sync (see Here Comes the New Dark Age: Blanket Licenses for Everything Based on the MMA). Just because a library is a non-profit doesn’t mean they get everything free or get to dictate the price. The librarians certainly don’t work for free so how can they expect the authors to do so?

There has never been a compulsory license for books and you have to believe that the Maryland law is a probing operation by Big Tech to see whether their land grab works at the state level. Do you think the oligarchs could jam a compulsory license for books through Congress if their true invisible hand was seen? Unlikely. If they couldn’t do it with wind in their sales from a noxious disease that devastated those pesky small businesses but enriched Big Tech beyond comprehension, it seems unlikely that they could get it through Congress during the nadir of Big Tech popularity.

This machine-state strategy is also an in-your-face rebuke to Senator Thom Tillis’ opposition to the Internet Archive’s pandemic rights-gouging practices, a rebuke that is supported by the “Library Futures” front group (which bears a striking strategic similarity to Engine Advocacy). Needless to say these “metashills” include all the usual suspects among their members including the Internet Archive next to the panoply of anti-artist groups.

The way shills become metashills is that they get grouped togther–economical for the donors and makes them look bigger than they are like a self-inflating animal.

Why does an obviously unconstitutional bill become law? Unhinged, you say? Blatantly unconstitutional from another looneyverse? True, and yet there it is, a monument to bagmen and shills. There is no other explanation for how this legislation got through that paragon of high-minded public policy, that epitoma suprema of the virtuous life and good government where corruption fears to tread also known as the Maryland General Assembly. (Followed closely in Annapolis’s sister city Albany, another hotbed of honesty.)

What about Google’s long march through the institutions? You may have neutral to fond memories of librarians from school days but I encourage you to look deeper. Is that librarian a helpful smart person? Or someone else. Is that librarian someone who grew up feeling ignored and overlooked like the one who never got asked to do the fun things? Is that librarian the one who really wrote the Great American Novel but had that Creative Writing Masters Thesis go–gasp–unpublished? Is that librarian someone who is ripe for manipulation and grooming by unfathomably rich people in the addiction business who claim to understand their problems and want to be their allies to Alinsky those who dared to commercialize their beloved books, those helpful tech moguls who want to build the Digital Library of Alexandria for the greater good and promise to not be evil? You know, for all mankind?

Whatever actually happened, Google has weaponized libraries starting at least with their mass digitization project that ultimately became the kloogy Google Books that one academic described as a “disaster for scholars” and that was the subject of criticism as culturally biased by no less than Jean-Noël Jeanneney, a former president of France’s Bibliothèque nationale in a scathing critique.

So not all librarians sip the Kool-Aid imported from the Googleplex or aspire to heated bidets. And not all state houses are as welcoming to Google and the other Tech Oligarchs as they were even a year ago or so when Senator Tillis recognized that the Internet Archive was being weaponized by its honcho Brewster Kahle (pronounced “kale”) against the world’s authors. Why do I think this? Because an anonymous whistleblower librarian gave us some insight into what is really going on in the faculty dining room in an open letter to Brewster Kahle during his pandemic-induced land grab he called the “National Emergency Library”:

You claim [the Archive is a] charitable organization. Charitable organizations provide money from their own funds to those in need or they collect donations of money or property, voluntarily offered by the original owners, to distribute to those in need. Taking from others despite their objections and offering the stolen material to those in need does not fall into the description of a charitable organization. It is, as has been pointed out, looting.

Your activity undermines the copyright system for your own benefit and in the financial interests of some of the wealthiest corporations in history. As has been said, the Internet Archive is not a public service but a pirate website. You are not here to help others- you are helping yourself to others’ property. It’s unfortunate that your supporters can’t admit this, or don’t realize it.

Well said. And let’s understand that what the Silicon Valley oligarchs really want is a true compulsory license for all works of copyright–which I think is exactly what the eponymous Mr. Kahle was actually after with his National Emergency Library, what Google wanted with Google Books, what YouTube wanted with the DMCA, and what Grokster and Morpheus wanted with file sharing. (Note that Napster was always trying to get a license, however hamhandedly, and shut down when they couldn’t get one.)

The Anonymous Librarian goes on to offer a lifeboat, which, unfortunately, will be summarily ignored by the metashills. While she was speaking of the pandemic effort at a compulsory license, these are words that will ring through the history of all these misguided efforts at undermining copyright:

It is a tragedy within a tragedy that anyone supports you in this effort to steal livelihoods away from authors who struggle to create the works that we love to read, as is evidenced by the glowing praise for the books you have taken and given away.

Brewster, you claim that the Internet Archive is a library- but do you want to know what real libraries do? They pay license fees for e-books and then allow their users to access the books. To be decent and truly human, you will apologize to the world and discontinue your grotesquely unfair challenge to authors. You will transform into something resembling a real library and provide funds to license access to these books for the benefit of the public. You have enough financial assets to pay for licenses to use these works. It has been pointed out that you have more than 100 million dollars in your Kahle-Austin Foundation [Now where might that $100 million have come from?]. You could provide the books to the public by paying license fees to authors and publishers- that is what real libraries do.

You could do this, Brewster, and then you would get real praise, and you would be worthy of it.

Pitch perfect summary of what is going on in Maryland and what may be going on in New York. In order to stop the Maryland bill from going into effect in 2022, authors are going to have to dip into their pockets to litigate against states with unlimited litigation budgets backstopped by the biggest corporations in commercial history. This is a familiar role to anyone trying to protect artist rights which is a group that clearly doesn’t include the Maryland General Assembly or Maryland Governor Larry Hogan who should all be ashamed of themselves. If you want to tell the Governor what you think of his unconstitutional travesty, you can contact him here.

Worse yet, it appears that New York has passed similar legislation that may be sitting on the Governor’s desk. I guess the real question is whether New York Attorney General Leticia James would like to come by the Algonquin Hotel to explain why New York has a compelling interest in crushing New York authors.

Guest Post: Honesty In Our Favor: HFA Loses Attempt To Exit Eight Mile Style Case–What Implications For MLC?

Guest post by Chris Castle

The Uniform Commercial Code defines “good faith” as “honesty in fact and the observance of reasonable commercial standards of fair dealing.”

Spotify was sued by Eight Mile Style and Martin Affiliated, two publishers that control rights in some of the early Eminem repertoire, including Lose Yourself. Remember that earlier this year, Spotify announced with great fanfare that Lose Yourself was streamed over 1 billion times on the platform. That’s just one measurement of Eminem’s dominance on Spotify. Turns out that Spotify had failed to license a good chunk of Eminem’s catalog.

The publishers eventually joined the Harry Fox Agency to the lawsuit as participating in the situation, adding claims of vicarious and contributory copyright infringement against the long-time publishing administrator to the industry. In fact, the Harry Fox Agency gave some people the impression that when it came to Section 115 of the Copyright Act, HFA thought they were the government. What ever is this venerable organization doing getting sued for copyright infringement instead of leading the charge against the infringer?

At one point a few years ago, quite a few years ago now, HFA decided to jump up on top of the wall. They started working for tech companies like Spotify and also administering publishing rights. That’s right–both sides. What could possibly go wrong?

Let me illustrate with an anecdote (one that does not involve HFA, or MRI for that matter). A highly ethical licensing administrator interviewed for a job handling music licensing for a big tech company. After several rounds of interviews, the administrator was told they weren’t getting the job. Asking for a reason, the tech company told the administrator that the company thought the administrator were likely going to flag and at least try to fix any problems they found in the tech company’s reporting. The administrator didn’t find this remarkable as this was the honest thing to do. The company said, we don’t want honesty when it’s not in our favor. The company hired someone else because they did not want “honesty in fact”.

There are serious allegations against the Harry Fox Agency in the Eight Mile Case. Remember, this is a defense motion to dismiss, so the plaintiff largely gets the benefit of the doubt in their favor. You may ask yourself what possible motivation could Spotify have for engaging in such risky behavior. In her order denying in part and granting in part HFA’s motion to dismiss, Judge Trauger puts her finger right on the most plausible explanation:

[I]t is undisputed that [Eminem, aka Marshall] Mathers is an artist who has enjoyed extraordinary commercial success and has built a large, dedicated fanbase, such that his omission from a major streaming platform might discourage some meaningful number of potential users from subscribing

In other words, they did it for the subscribers, they did it for the growth and they did it for the money.

While Eight Mile alleged both vicarious and contributory infringement, Judge Trauger dismissed the claim for vicarious infringement on technical grounds (with leave to amend). Not so with the claim for contributory infringement, however:

HFA objects that it was under no obligation to police Spotify’s in-house decisions regarding infringement. Whether that is true or not, the plaintiffs have not merely alleged that HFA failed to affirmatively police Spotify’s conduct; they have alleged both that HFA knew and, through the ordinary fulfillment of its duties, should have known that the infringement was occurring and that HFA was helping to conceal it.…There is little doubt, moreover, that those allegations of knowledge were pleaded sufficiently. Even when a claim is governed by the heightened pleading requirements of Rule 9(b), “[m]alice, intent, knowledge, and other conditions of a person’s mind may be alleged generally.” Fed. R. Civ. P. 9(b). The Supreme Court, moreover, has recognized a party’s “aiming to satisfy a known source of demand for copyright infringement” as evidence of an improper purpose in the contributory infringement analysis. Grokster, 545 U.S. at 939. That circumstantial evidence is only heightened when the defendant, knowing of the capacity for infringement, fails to take steps to avoid it. See id. (citing Groskter’s lack of “attempt[s] to develop filtering tools or other mechanisms to diminish the infringing activity using their software”).

The plaintiffs have plausibly alleged that HFA became aware of Spotify’s licensing predicament and offered services that directly filled its need to maintain an illusion of lawfulness while continuing to infringe. 

If these allegations turn out to be proven true, songwriters (and the Copyright Office for that matter) may well ask themselves if there are implications for HFA’s continued role as a vendor for The MLC, if not why they were selected in the first place.

This post first appeared in MusicTechPolicy

The Metadata Hot Potato: The MLC Enters the Jerry McGuire Reality

By Chris Castle

Here it is: Today is the day that the MLC is required to send out their first round of statements and payments. The deadline they gave themselves when their wrote their law.

The MLC is about to hear those beautiful words. They will hear it in English. They will hear it in Spanish. They will hear it in Bantu, French, Portuguese, Pashto, Russian, Hausa, Berber and Czech.

And songwriters will say it like they mean it. They won’t want to hear about “connect to collect” they won’t want to hear about “play your part” or the ontological definition of “match.”

They will say just one thing–show me. The MLC will hear it on the phone, in email, maybe even in person. And songwriters will want to hear everyone at MLC say those magic words. Loud. The family motto. A very personal and important thing. It should be said with conviction maybe even shouted from the rooftops.

No more hot potato. And while it may start with MLC it won’t end there. If the services think they are off the hook, there’s just one thing to say. Are you ready? You know what it is.

The money. They got it, we want it, now show it. Very simple.

But just in case it doesn’t all go swimmingly on April 15, it might be time to start thinking about drafting an affirmative obligation on your publisher to take care of any bad data in your publishing or administration agreements (or at least try–let me know how far you get). Most of what I’ve heard anecdotally about the quality of the MLC public database leads me to think that songwriters think the publisher is registering their songs correctly at the MLC. So why not put it in writing?

If you don’t, that hot potato will just keep on bouncing around if there’s not a clear place where the buck stops. The services will blame the MLC, the MLC will say you didn’t connect to collect to play your part, your publisher will blame the MLC, and round and round and round it goes.

You know what you tell them, right? The family motto.

This post first appeared on MusicTechPolicy

The DLC Finally Confirms (Sort Of) How Much is in the MMA Black Box–Bigger than a breadbox

By Chris Castle

[This post first appeared on MusicTechPolicy]

We’ve all heard rumors about how much is in the “inception to date” black box at the digital music services. The main reason that nobody knows is another example of the dismal drafting of the Music Modernization Act.

Limitation on Liability

Wouldn’t you think that if the class actions against Spotify gave the insiders the leverage to negotiate the MMA giveaway that they could at least have gotten an immediate accounting from the services for how much of the songwriters’ money they’ve been holding all these years? But no, it’s sleepy time in Washington yet again. From the Land of Frozen Mechanicals they bring you more Brinksmanship 101. The retroactive black box payment is due to be made by the services to the MLC and its data vendor, HFA–remembering that HFA was also the data vendor for at least some of the services that created the black box in the first place.

limitation on liability 2

However, there is some activity at the Copyright Office now about how to get this money paid. It’s at the Copyright Office because while drafting the aircraft carrier revision to the Copyright Act (aka Title I of the Music Modernization Act), the hard parts were never drafted and were left to the Copyright Office to handle through regulations. Musicians–you’ve seen this before. This is the Washington version of “we’ll fix it in the mix.” So you do have feel sympathy for the Copyright Office in the situation when all the smart people leave them twisting in the breeze.

Not that I necessarily believe this number, but for the first time the services have given a bigger than a breadbox idea of how much is in the black box. The DLC’s lawyers filed an “ex parte” letter in which they made that revelation (along with the known universe: Artist Rights Alliance Ex Parte Letter (Nov. 17, 2020)Digital Licensee Coordinator Ex Parte Letter (Nov. 17, 2020)Mechanical Licensing Collective Ex Parte Letter (Nov. 17, 2020)Music Artists Coalition Ex Parte Letter (Nov. 17, 2020)Nashville Songwriters Association International Ex Parte Letter (Nov. 17, 2020)National Music Publishers’ Association Ex Parte Letter (Nov. 17, 2020)Recording Academy & Songwriters of North America Ex Parte Letter (Nov. 17, 2020)Songwriters Guild of America et al. Ex Parte Letter (Nov. 18, 2020).)

The DLC itself is at the mercy of its members in terms of revealing this number but they claim the following in the Digital Licensee Coordinator Ex Parte Letter (Nov. 17, 2020):

DLC also provided a rough estimate of accrued royalties that are available to be transferred to the MLC, based on a limited survey of a subset of DLC members at a particular point in time, and with the crucial caveat that the precise amounts are in flux as digital music providers continue to engage in robust matching efforts. Specifically, DLC estimated that several hundred million dollars were available to be transferred to the MLC as accrued royalties, even after accounting for the derecognition of accruals based on preexisting agreements containing releases to claims for accrued royalties.

DLC also explained that the accruals that were derecognized because copyright owners were paid and provided releases were a fraction of that amount—on the order of tens of millions of dollars.

So now we know at least that much. We know there are “several hundred million” dollars at issue in the black box and we generally know where the money is. We may know that DLC members hold the money. We also know that this money has not been identified, but we at least know enough to get the nose of the camel in the tent.

Chris Castle’s Copyright Office Comments on the Black Box Controversy

Here’s some more MLC news you’ll never read about in the trade press.

Yesterday we posted a shocking revelation from the MediaNet/SOCAN ex parte letter to the Copyright Office: It appears that the digital music services have no intention of complying with the much ballyhooed benefit to the Music Modernization Act–in return for the “reach back” safe harbor that somebody decided to grant the services retroactively, the services would pay over (or you could say “disgorge”) all the unmatched and unpaid mechanical royalties that they were holding, sometimes for years, and always secretly. (Adding insult to injury, MediaNet seems to think that referring to SOCAN’s ownership of MediaNet somehow makes screwing us over into a songwriter-friendly act of good fellowship and felicity. More likely, SOCAN itself knows nothing about it.)

Remember, MediaNet straight up threatened to decline the reach back safe harbor and not pay over the black box. As it turns out, MediaNet’s position is not unique–as Chris Castle identified in his reply comment on the Copyright Office’s black box study, all of the services represented by the DLC made that exact threat to the Copyright Office. As Chris observes, these are not idle threats. They are made by the biggest corporations in commercial history, one of which may be broken up due to antitrust investigations on two continents.

Something must be done and done quickly before the DLC decides to take the blanket license without the limitation on liability for past infringements having successfully scared off anyone who could have sued but didn’t thinking that there was a fixed reach back safe harbor. That seems like it will result in the big guys having paid off the big guys in the NMPA’s secret settlement that was being negotiated simultaneously with the MMA (the NMPA’s umbrella December 17, 2017 Pending and Unmatched Usage Agreement referenced in the MediaNet ex parte letter and talked around in other filings. Remember–the MMA was introduced a few days after the secret NMPA agreement on December 21, 2017 and Wixen Music Publishing felt they had to sue Spotify by December 31, 2017 because of the reach back safe harbor. So everyone except the songwriters–and perhaps most Members of Congress–seems to have known that the fix was in on black box.)

Another fine mess they got us into. Here’s the except from Chris Castle’s reply comment:

The DLC’s Quid Pro Quo Revelation

The concept of a “black box” distribution is a pale mimic of a simple
fact: It is not their money. The fundamental step that Title I excuses
is basic and would solve much of the unmatched problem if Title I did
not exist: Don’t use a work unless you have the rights.

It is a fundamental aspect of copyright licensing and it is not metaphysical.
Yet the message from all negotiators concerned in this process seems
to shelter legitimacy in a complication of dangers to the black box that
come down to another simple fact: Obey and be quick about it or the
law will take your money and give it to someone else.

How much is in the black box? They won’t tell you. From where? Not
your business. From when? Confidential. Is it yours? Already paid it
to someone else before you even knew it was there. And Lord knows
that money once taken incorrectly in the dark is unlikely to be paid
correctly in the light.

Comments by the DLC demonstrate conclusively that addressing the
black box has taken on even greater urgency. The DLC’s Initial
Comment in a related docket is unusually revelatory for a group with a
multitrillion dollar market capitalization that loves them some
protective orders. This passage is particularly breathtaking:

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

If that were “the deal” it is news to me, and I like to think that I’ve
been reading along at home pretty attentively. If I wasn’t aware of
“the deal”, I’m sure I wasn’t alone in my ignorance, but I’m far more
understanding of why the negotiators would have been motivated to
keep “the deal” under wraps if that’s really what it was.

If “the deal” wasn’t kept quiet, someone might have asked why there
was a “deal” when the services were simply agreeing to pay money
they already owed and that they were already obligated to pay for infringements that already occurred. Yet, services still got the new
safe harbor trophy to put on the wall in the copyright hunting lodge
next to the DMCA and Section 230.

The gall doesn’t end there, however. The DLC goes on to make this
threat of imminent harm:

[The “deal”] is a crucial point for the Office to keep in mind as it
crafts rules in this space. If the regulations make it less likely
that a DMP will be able to rely on that liability protection when
it needs it—i.e., if it increases the risk that a court would deem a
DMP to not have complied with the requirements in section
115(d)(10)—a DMP could make the rational choice to forego the
payment of accrued royalties entirely, and save that money to
use in defending itself against any infringement suits.

It is a bit odd that the DLC seems to think of Title I as their private
contract, but there it is. The DLC members’ anticipatory repudiation
of the purported deal that the world now knows underpins Title I was
both refreshingly brazen and starkly shocking. Given that the Eight
Mile Style
case against DLC member Spotify (and both Spotify and
The MLC’s vendor the Harry Fox Agency) is a live action, the DLC is
not making an idle threat. The DLC tells us that if its market cap isn’t quite high enough to suit, Spotify could immediately dip into the black
box for “money to use in defending itself.”

The relationship with the services apparently has settled into the
customary laying about with threats and blackguarding both
songwriters and the Copyright Office. That’s reassuring in confirming
that human nature hasn’t actually changed and these companies really
were the Data Lords we had always known our betters to be after all,
sure as boots.17 Maybe one day the scorpion really won’t sting the frog.
Maybe another “unity dinner” is in order. But not today.

Regardless, it is clear that the Copyright Office is almost the only place
that songwriters can go for relief and an explanation of how the MMA
is to be implemented whatever secret deal the DLC now purports to
have made. Given the DLC’s unequivocal threat on behalf of its
members, there is no doubt of the imminent danger that the black
box currently being held is about to vanish into thin air if something
isn’t done immediately to preserve the status quo. The balance of
hardships pretty clearly tilts in favor of the songwriters as the safe
harbor services control the money and always have.

Copyright Office Comments by Composer @KerryMuzzey: Include Songwriter Credits in MLC Database

[Kerry Muzzey is an independent classical and film composer and artist rights advocate. In his comment to the Copyright Office on the MLC regulations he asks why songwriter names are not required to be included in the public database currently being stewarded by The MLC, Inc. Including songwriter names in the database seems like a fundamental building block of identifying a song–assuming that’s what you want to do. It would be like SoundExchange reporting not including an artist name in the transaction data. It makes no sense. Yet, it’s an issue as we will see.]

My name is Kerry Muzzey. I am an independent classical and film composer, and am self-published. It is crucial that the MLC database be searchable and completely public-facing, not only by song title but by writer’s name and publishing entity name or by ISWC or BMI/ASCAP IPI/CAE. Independent artists and music publishers must have the ability to search the “black box” of royalty collection, not only for unpaid royalties, but for accrued royalties that appear under a misspelling of an individual’s name, publishing entity, or in the event that a similar song title has resulted in the misattribution of the writer/publisher credit to another writer/publisher or artist. This transparency is essential not only for accurate accounting of royalties for an individual, but also for any works that are co-written, have multiple publishers, and/or whose performance rights are represented by multiple PROs. Any composer, songwriter or music publisher should have the ability to “disambiguate” their works from any other similar- or matching-title works or similar or identical writer names, by a simple error submission/correction process (after completing any necessary verification of identity). 

Read the entire comment here.