Kafka’s Hypothetical Market Strikes Again: The DSPs’ Latest Move to Silence Songwriters by Throwing GMR Out of Phonorecords V

If you want to understand how the streaming services really view songwriters, look no further than their joint motion to exclude Global Music Rights (GMR) from Phonorecords V. It is not subtle. It is not principled. It is an attempt to narrow the field to those voices the services already know how to manage. (All of these services are being investigated by the Texas Attorney General “over alleged payola schemes in which they accept bribes to artificially promote certain songs, artists, or content.”)

The Services—Spotify, Apple, Amazon, Pandora, and Google—argue that GMR lacks a “significant interest” because it licenses performance rights rather than mechanical rights. That argument is technically obvious and substantively hollow, a mile wide and an inch deep, if that. GMR represents songwriters whose mechanical royalties are directly at issue in this proceeding. The idea that those songwriters somehow lose their “significant interest” because their representative also licenses performance rights is not just formalism. It is exclusion by design.

Let’s be clear about what is at stake. GMR affiliates include some of the most commercially significant songwriters in the world—writers like Drake, Bruno Mars, The Weeknd, Pharrell Williams, Nicki Minaj, Post Malone, Pearl Jam, Prince, and Tyler, the Creator. Nobody else in this proceeding speaks for them. Not the NMPA, which represents publishers. Not the services, who are adverse. And certainly not a system that already tilts toward the parties who can afford to litigate at scale.

When songwriters affiliated with Global Music Rights made a choice about how to license their work, they chose a free market model. They chose to be represented by GMR and to negotiate performance royalties directly with users, in arm’s-length, private negotiations reflecting real-world value. That decision matters. It reflects a preference for market pricing over regulatory pricing, and for merit over compulsion.

But the moment you shift from performance rights to mechanical rights, that choice disappears. Why?

Well, that’s a good question, but the answer for now is that under section 115 of the Copyright Act, those same songwriters are forced into a compulsory license regime administered in large part through the CRB which sets the rates. They cannot opt out. They cannot negotiate freely. Instead, their work is swept into a statutory system where rates are set through a complex, expensive, and heavily lawyered process that bears little resemblance to a functioning market. It is a hypothetical market.

So we end up in a strange place, a Kafkaesque place. The same songwriter who can negotiate directly for the public performance of their work is denied that freedom when it comes to the reproduction and distribution of that same work. One side of the market is competitive and arms length. The other is managed and hypothetical.

That is not a neutral design choice. It is a structural constraint—one that continues to shape outcomes in favor of the services.

The Services claim that GMR lacks a “direct financial interest” in the outcome. That is a remarkable position. The entire proceeding is about setting the value of musical works in streaming. If the rate goes down, songwriters get paid less. If the rate goes up, they get paid more. That is the definition of a direct financial interest. The Services’ attempt to redefine “direct” to exclude the very creators whose works are being priced is not statutory interpretation. It is outcome engineering.

The Services also argue that GMR’s interest is merely “indirect” or “attenuated.” This requires ignoring the bargaining power of the songwriters who effectively are GMR. But this is the same playbook the services have used for years: isolate each rights silo, then argue that no one outside the narrowest licensing box is entitled to speak. The result is a fragmented system where the only voices that remain are those structurally aligned with the services’ preferred outcome.

Then there is the efficiency argument—the Services’ claim that allowing GMR to participate would make the proceeding “lengthy, complex, and expensive.” As opposed to what? Nasty, brutish and short?

That would be more persuasive if it were not coming from the very companies that have turned CRB proceedings into multi-year, multi-million-dollar wars of attrition. These are the largest corporations in commercial history (at least one of which is an adjudicated monopoly) arguing that the problem is too many songwriters having a voice.

Let’s call this what it is: a coordinated effort by a handful of dominant platforms to use their collective market power—and their litigation budgets—to shape the CRB process in their favor. The same companies that work relentlessly to drive down the royalties paid to songwriters are now trying to limit who is allowed to advocate for those songwriters to get fair treatment in the first place.

And here is the practical reality the Services are ignoring: even if the Judges exclude GMR, they are not solving the problem. They are postponing it. When the decision is released for public comment, the absence of these voices will not go unnoticed. It will be exposed—and it will undermine the legitimacy of the outcome. Because they’ll be back for comments which will attack the entire proceeding as arbitrary.

The CRB process already leans heavily toward those who can afford to participate. That is a structural fact. But actively excluding a representative of major songwriters—on the theory that those songwriters do not have a “significant interest” in how their own royalties are set—crosses a different line.

The Judges should reject this motion out of hand.

Because if the people who write the songs do not have a seat at the table, then whatever this process is—it is not a willing buyer, willing seller marketplace. Excluding GMR would raise the question of whether it was ever intended to be one.

@johnpgatta Interviews @davidclowery in Jambands

David Lowery sits down with John Patrick Gatta at Jambands for a wide-ranging conversation that threads 40 years of Camper Van Beethoven and Cracker through the stories behind David’s 3 disc release Fathers, Sons and Brothers and how artists survive the modern music economy. Songwriter rights, road-tested bands, or why records still matter. Read it here.

David Lowery toured this year with a mix of shows celebrating the 40th anniversary of Camper Van Beethoven’s debut, Telephone Free Landslide Victory, duo and band gigs with Cracker, as well as solo dates promoting his recently-released Fathers, Sons and Brothers.

Fathers, the 28-track musical memoir of Lowery’s personal life explored childhood memories, drugs at Disneyland and broken relationships. Of course, it tackles his lengthy career as an indie and major label artist who catalog highlights include the alt-rock classic “Take the Skinheads Bowling” and commercial breakthrough of “Teen Angst” and “Low.” The album works as a selection of songs that encapsulate much of his musical history— folk, country and rock—as well as an illuminating narrative that relates the ups, downs, tenacity, reflection and resolve of more than four decades as a musician.

United for Artists’ Rights: Amicus Briefs Filed in Vetter v. Resnik Support Global Copyright Termination for Songwriters and Authors: Brief by Music Artists Coalition, Black Music Action Coalition, Artists Rights Alliance, Songwriters Of North America, and Screen Actors Guild-American Federation Of Television And Radio Artists

In Vetter v. Resnik, songwriter Cyril Vetter won his trial case in Baton Rouge allowing him to recover worldwide rights in his song “Double Shot of My Baby’s Love” after serving his 35 year termination notice on his former publisher, Resnik Music Group. The publisher appealed. The Fifth Circuit Court of Appeals will hear the case and currently is weighing whether U.S. copyright termination rights include “foreign” territories—a question that strikes at the heart of artists’ ability to reclaim their work worldwide (whatever “foreign” means).

Cyril’s attorney Tim Kappel explains the case if you need an explainer:

An astonishing number of friend of the court briefs were filed by many songwriter groups. We’re going to post them all and today’s brief is by Music Artists Coalition, Black Music Action Coalition, Artists Rights Alliance, Songwriters Of North America, And Screen Actors Guild-American Federation Of Television And Radio Artists–that’s right, the SAG-AFTRA union is with us.

We believe the answer must be yes. Congress gave creators and their heirs the right a “second bite at the apple” to regain control of their work after decades, and that promise means little if global rights are excluded. The outcome of this case could either reaffirm that promise—or open the door for multinational publishers to sidestep it entirely.

That’s why we’re sharing friend of the court briefs from across the creative communities. Each one brings a different perspective—but all defend the principle that artists deserve a real, global right to take back what’s theirs, because as Chris said, Congress did not give authors a second bite at half the apple.

Read the latest amicus brief below, watch this space for more.

United for Artists’ Rights: Amicus Briefs Filed in Vetter v. Resnik Support Global Copyright Termination for Songwriters and Authors: The Authors Guild, Inc., Dramatists Legal Defense Fund, Inc., Novelists, Inc., Romance Writers Of America, Inc., Society Of Composers & Lyricists, Inc. and Songwriters Guild Of America, Inc.

In Vetter v. Resnik, songwriter Cyril Vetter won his trial case in Baton Rouge allowing him to recover worldwide rights in his song “Double Shot of My Baby’s Love” after serving his 35 year termination notice on his former publisher, Resnik Music Group. The publisher appealed. The Fifth Circuit Court of Appeals will hear the case and currently is weighing whether U.S. copyright termination rights include “foreign” territories—a question that strikes at the heart of artists’ ability to reclaim their work worldwide (whatever “foreign” means).

Cyril’s attorney Tim Kappel explains the case if you need an explainer:

An astonishing number of friend of the court briefs were filed by many songwriter groups. We’re going to post them all and today’s brief is by The Authors Guild, Inc., Dramatists Legal Defense Fund, Inc., Novelists, Inc., Romance Writers Of America, Inc., Society Of Composers & Lyricists, Inc. and Songwriters Guild Of America, Inc.

We believe the answer must be yes. Congress gave creators and their heirs the right to regain control of their work after decades, and that promise means little if global rights are excluded. The outcome of this case could either reaffirm that promise—or open the door for multinational publishers to sidestep it entirely.

That’s why we’re sharing friend of the court briefs from across the creative communities. Each one brings a different perspective—but all defend the principle that artists deserve a real, global right to take back what’s theirs, because as Chris said Congress did not give authors a second bite at half the apple.

Read the latest amicus brief below.

Pandora Suit May Upend Century-Old Royalty Plan | NY Times

After federal antitrust investigations, both groups agreed to government supervision in 1941.

This system has hummed along for decades. But with the rise of Internet radio, publishers have complained that the rules are antiquated and unfair. They point to the disparity in the way Pandora compensates the two sides of the music business: Last year, Pandora paid 49 percent of its revenue, or about $313 million, to record companies, but only 4 percent, or about $26 million, to publishers.

“It’s a godawful system that just doesn’t work,” said Martin N. Bandier, the chairman of Sony/ATV, the world’s largest music publisher.

The wider music world has been galvanized by the issue of low royalties from fast-growing streaming companies.

For songwriters, Ascap and BMI have also been among the most reliable institutions in the music industry, and few want to see them go. But Rick Carnes, a Nashville songwriter and president of the Songwriters Guild of America, said that while these organizations had served him and his colleagues well, the Justice Department agreements that govern them were outdated and must be changed.

“This is a horse-and-buggy consent decree in a digital environment,” Mr. Carnes said. “There’s no way that works now.”

READ THE FULL STORY AT THE NEW YORK TIMES:
http://www.nytimes.com/2014/02/14/business/media/pandora-suit-may-upend-century-old-royalty-plan.html?