How Spotify (and others) Could Have Avoided Songwriter Lawsuits, Ask The Labels.

This is simply a story about intent. Daniel Ek is the co-founder of Spotify, he was also the CEO of u-torrent, the worlds most successful bit-torrent client. As far we know u-torrent has never secured music licenses or paid any royalties to any artists, ever.

Spotify could have completely avoided it’s legal issues around paying songwriters.  The company could have sought to obtain the most recent information about the publishing and songwriters for every track at the service.  The record labels providing the master recordings to Spotify are required to have this information. All Spotify (and others) had to do, was ask for it.

Here’s how it works.

For decades publishers and songwriters have been paid their share of record sales (known as “mechanicals”) by the record labels in the United States. This is a system whereby the labels collect the money from retailers and pay the publishers/songwriters their share. It has worked pretty well for decades and has not required a industry wide, central master database (public or private) to administer these licenses or make the appropriate payments.

This system has worked because each label is responsible for paying the publishers and songwriters attached to the master recordings the label is monetizing. The labels are responsible for making sure all of the publishers and writers are paid. If you are a writer or publisher and you haven’t been paid, you know where the money is – it is at the record label.

Streaming services pay the “mechanicals” at source which are determined by different formulas and rules based upon the use. For example non-interactive streaming and web radio (simulcasts and Pandora) are calculated and paid via the appropriate performing rights society like ASCAP or BMI. These publishing royalties are treated more like radio royalties.

The “mechanicals” for album sales from interactive streaming services are calculated in a different way. It is the responsibility of the streaming services to pay these royalties. CDBaby explains the system here and here. Don’t mind that these explanations are an attempt to sell musicians more CDBaby services, just focus on the information provided for a better understanding of this issue.

Every physical album and transactional download (itunes and the like) pays the “mechanical” publishing to the record label directly, who then pays the publishers and writers.  This publishing information exists as labels providing the master recordings to Spotify have this information. All Spotify (and others) have to do, is ask for it.

Record labels have collectively and effectively “crowd sourced” licensing and payments to publishers and songwriters for decades. Why can’t Spotify simply require this information from labels, when the labels deliver their masters? It’s just that simple. Period.

The simple, easy, and transparent solution to Spotify’s licensing crisis is to require record labels to provide the mechanical license information on every song delivered to Spotify. The labels already have this information.

The simple solution is for Spotify to withdraw any and all songs from the service until the label who has delivered the master recording also delivers the corresponding publisher and writer information for proper licensing and payments. Problem solved!

No need for additional databases or imagined licensing problems. Every master recording on Spotify is delivered by a record label. Every record label is required by law to pay the publishers and songwriters. This is known and readily available information by the people who are delivering the recordings to Spotify!

There is no missing information, and no unknown licenses. Why is this so F’ing hard?

This system would mean that the record labels would have to provide this information. It’s also possible that some of that information is not accurate. Labels would probably fight against any mechanism that would make them have to make any claims about the accuracy of their data, which is fine. If it’s the most update information it’s a great place to start.

Of course, we know that both sides (both labels and streamers) will reject any mechanism that introduces friction into the delivery of masters. However, with the simple intent of requiring publisher and songwriter info for every song master delivered there will no longer be a problem at the scale that currently exists.

To be completely fair to Spotify they did work to make deals with the largest organizations representing publishers and songwriters (NMPA and HFA). However those two organizations leave out a lot of participants. So back to square one. If publishing information is required upon the delivery of masters, the problem is largely solved. Invoking a variation on Occam’s Razor, the best solution is usually the most simple one.

You’d think that in the times before computers this would have been harder than it is now, but like all things Spotify you have to question the motivations of a company whose founder created the most successful bittorrent client of all time, u-torrent.

Oh, and of this writing Spotify is now claiming they have no responsibility to pay any “mechanicals” at all. Can’t make this up.

 

Songwriters Are Losing $2.3 Billion A Year Due To Outdated Government Regulations | BuzzFeed

Right now a byzantine system is in place that not only dates back more than 70 years but also differs depending on the distribution platform. Traditional radio stations, for instance, pay royalties to the composer of a song, but not to the artist or band performing it — known in industry parlance as a performance right — if they are different. Sirius XM only pays royalties for songs released after 1972. Pandora does pay government-mandated royalties to songwriters but has been aggressively lobbying regulators to lower the rate in recent years. Use of music in both professional and user-based content on YouTube and other websites and in TV shows or commercials is yet another category of music licensing, with the difference being that it is free-market-based and not subject to government oversight.

READ THE FULL STORY AT BUZZFEED:
http://www.buzzfeed.com/peterlauria/songwriters-are-losing-23-billion-a-year-due-to-outdated-gov

BREAKING: Pandora Runs to the Government to Screw Songwriters Again

Good news: Pandora is scheduled to come to the stock market with a “secondary offering”, meaning the company is essentially having a second IPO. According to the Wall Street Journal:

The Internet radio company and its venture-capital backer Crosslink Capital Inc. are slated to offer 14 million shares late Thursday[, i.e., tomorrow], a stake that was worth $336 million when it was announced after Monday’s close.

So music is good business, right? It sure is–for everyone but the songwriters and artists.

In case any songwriter wondered, Pandora has more money than you and they intend to use it to screw you as hard as they possibly can to enrich themselves.

Today Pandora won a truly Pandora-style “victory” in the ASCAP rate court by getting a federal judge to rule that Pandora–a monopolist in webcasting–can use the out of date ASCAP consent decree to force songwriters to license to them.

And make no mistake–this is a very important case to Pandora because the one way that songwriters have of getting out of the trap inside Pandora’s house of cards is to say no and refuse to license to Pandora. And “no” is the one thing that Pandora can’t have you say because their only product is music. The government granted them an effective monopoly on webcasting and Pandora intends to keep it that way.

READ THE FULL POST HERE AT MUSIC TECH POLICY:
http://musictechpolicy.wordpress.com/2013/09/18/pandora-runs-to-the-government-to-screw-songwriters-again/

MORE HERE AT DIGITAL MUSIC NEWS:
http://www.digitalmusicnews.com/permalink/2013/20130918pandora