Music piracy is a subject that has been talked to death over the past decade. So much, in fact, that it seems scarce conceivable that we could say anything more of interest on the subject.
The fundamental point I’d like you to take away from this is: it’s a lot more important to keep a watchful eye on ostensibly legal services – recall that both Pandora and (perhaps to a lesser extent) YouTube are legit – than to agonize over overt piracy.
That pirate services should be hunted to as close to extinction as is feasible goes without saying, but we mustn’t lose sight of the fact that nobody deserves a medal for going legit. It’s what you’re f-ing supposed to do.
READ THE FULL POST AT THE CYNICAL MUSICIAN:
MTP: How was the audience reaction for your first 30 days on the I Respect Music petition campaign?
Blake Morgan: It’s honestly––and very happily––been above and beyond anything we could have estimated or ever hoped for. If you ask anyone who’s been working with me on this, they’ll tell you that the goal I’d set for us was to try to get 1,000 signatures in our first 30 days. A daunting number to try and reach for a petition to Congress about paying artists for radio airplay. But, it turns out that after 30 days we’re actually at 10,000 signatures.
A Huffington Post Op-ed of mine in December [“Art and Music Are Professions Worth Fighting For“] garnered a huge reaction going viral with over 44,000 likes and over 8,000 Facebook shares. That was the piece where I first wrote the words “I Respect Music.” So I knew there was a massive and untapped demographic of music makers and music lovers out there, but “liking” or “sharing” something is very different from putting your name on a letter to Congress. I wanted to see what would would happen if we gave people a concrete, universal, and positive way to affect change in the music world, and look what happened. I doubt seriously if the House Intellectual Property Subcommittee has ever seen anything like this.
And, this is the scariest thing the powerful forces who consistently stand against artists’ rights could possibly witness: a mobilized, united, grass-roots movement that is pushing for legislation to pay artists and musicians for their work. So that’s scary, as in awesome!!
MTP: I’m interested in the composition of the people responding to the petition. Based on my own very unscientific random sampling of the people tweeting about it, supporters seemed like a mix of fans and artists. Does that sound about right? Do you have any way to determine their background?
Blake Morgan: That’s exactly right. The I Respect Music petition begins with,”I join music makers and music lovers alike in urging Congress to support artists’ pay for radio play.” And that’s precisely who’s been supporting it, signing it, and Tweeting and posting selfies with “#IRespectMusic” written on a card or piece of paper. It’s those photos––and the variety of them––that has really moved people, both to sign the petition and to get involved in general. People are discovering that there’s something special about taking that particular photo and holding up those particular words. Something powerful. And empowering.
MTP: I saw that James Otto tweeted that he signed the petition, any other luminaries?
Blake Morgan: Yeah, you could say that! In addition to everyday working musicians, music fans, and music organizations, it’s been luminaries as diverse as Patrick Stewart, Gavin DeGraw, David Byrne, Gloria Steinem, Jean Michel Jarre, Clap Your Hands Say Yeah, Roseanne Cash, Mike Mills, John McCrea, Civil Twilight––even Jane Fonda. And thousands of others, with more every day. It really has been music makers and music lovers alike “getting it,” that artists should be paid for their work. Plain and simple.
MTP: Even the 40 Watt club in Athens! Imagine, nightclubs giving signage for free!
Blake Morgan: Imagine!
MTP: What’s the reaction been from Capitol Hill?
Blake Morgan: Well as I said before, I doubt seriously if the House Judiciary Subcommittee on Courts, Intellectual Property, and the Internet has ever seen anything like this before. And that’s exactly what’s been reported to me from multiple sources connected both to the subcommittee directly, and from others on and around Capitol Hill.
What really matters though is that there’s a real chance now that we’re going to see a bill proposed. And proposed in the very short term. Meaning possibly in a matter of weeks, not months. So there’s no question that we’ve moved the needle, and moved it big time.
Keep in mind that these aren’t lobbyists pushing the I Respect Music petition. These are voters, from every corner of the country with more and more joining every day. And, artists getting paid for radio airplay has become an issue that these voters are going to fight for––they’re going to use their votes and their voices to win this fight.
I mean seriously, the United States is the only democratic country in the world where artists don’t get paid for radio airplay? And in holding to this policy we’re standing with Iran and North Korea? You know, sometimes these things are tough to figure out or parse. And sometimes they’re um…really not.
So let’s win this fight. Let’s respect music. Let’s respect the people who make music, and the people who love it too.
100 million DMCA notices later, despite Google’s many protestation of the billions and billions links it;s demoted for violating Google’s various policies against bad stuff…no that’s millions and millions…or maybe hundreds of thousands…or maybe dozens…YouTube’s still going strong in the categories of raunchy, salacious, hateful and downright profitable videos.
Take for example a simple YouTube search for the word “jailbait”. Remember–this is YouTube, the most popular online video site for teens and preteens. (For our ex-US readers, “jailbait” is a common slang word describing (almost always) young women who are under age. A word slanted from the point of view of the over-age male who risks being charged with statutory rape if he has sex with the young woman and a word that carries with it the implication that the young woman is baiting the encounter (because, you know, she looked over 18). Hence, jailbait. And men, if this doesn’t make your blood boil, just wait til you have a teenage daughter, niece, cousin, or other relative. Trust me, there’s not one thing that is funny about it.)
Here’s what you come up with in a YouTube search for “jailbait”:
Yes, that video is just a series of still images of very, very young looking girls. Monetized with an embedded ad in the video as well as an ad from Kraft for…mac and cheese.
Continuing on the same theme, we have “Disney Jailbait Heaven”, monetized with a pre-roll ad for the Hannibal television series from NBC.
And as noted above, the “Disney Jailbait Heaven” video admonishes us as follows:
Not surprisingly, we find this video featured in the “if you liked Disney Jailbait Heaven, You’ll Love” index on the right hand side of the YouTube page (2nd from the top) next to NBC’s pre-roll ad:
You get the idea.
You can also pick a search term from Google Adwords Unapproved Pharmaceuticals List, let’s try Arimidex:
Here’s a video about Arimidex (just one of hundreds). This one features one of the benefits of the drug, “How to Get Rid of Man Boobs” and it’s from the Twin Muscle Workout channel (which looks to be a YouTube partner account). Now why would one need to do that with Arimidex? Oh, perhaps side effects from testosterone injections? Which I’m sure is exactly what Blue Cross wanted to advertise against. And since the BCBS ad is about the Affordable Care Act, one wonders if this campaign was paid for with some of the money that is appropriated in the ACA for the Obamacare public information campaign.
And speaking of injections, how about “Flagging the Femoral Vein” in case you had a question in that regard:
Not to mention “Bangin’ Up For Dummies” from a very cosmopolitan YouTuber:
In part 2 we will look at YouTube’s hate videos using the Antidefamation League’s “Bigots Who Rock” list, jihadi recruiting videos and the ever present “how to” dope videos.
UPDATE: After posting about it for a year or so, YouTube finally took down “Banging Up For Dummies” which was one of YouTube’s famous “how to” videos, this one on “how to” shoot heroin narrated by an Aussie who was so high he could barely speak, but not too high to cook up a little sumthin and shoot it. The video is now replaced by this message:
So “this video has been removed as a violation of YouTube’s policy on depiction of harmful activities”. Really. That’s called the “passive voice” for you high school English students who are reading along. In the passive voice, the subject of the sentence become the object or the object is intuited by the context. It’s particularly popular with bureaucrats as in the classic “Mistakes were made,” because the bureaucrat has to say something but doesn’t want to take responsibility especially if by doing so the responsibility that might lead to culpability.
This might be especially true if, for example, one were party to a nonprosecution agreement with the U.S. Department of Justice regarding the violations of the Controlled Substances Act by your most senior executives.
So if one said, “YouTube decided to remove this video because it depicted violations of the law” one would have to explain why YouTube took responsibility for (a) deciding that action in the video violated a law, (b) which law did it violate, (c) YouTube had a policy about such things, and (d) YouTube decided to take down the video for reasons known to YouTube (also known in the Google astroturf world as “censorship”) all these things might be clear. Realize that these are not the acts of a third party (aside from posting the video), these are the acts of Google made after they allowed the video to be posted and played on YouTube for quite some time.
So if the video violated YouTube’s policies when it was taken down and it wasn’t altered while it was posted (which it wasn’t as far as I can tell), then presumably it also violated YouTube’s policies when it was posted. But because it profits Google to allow a floodgate of garbage to populate YouTube, Google couldn’t be bothered to enforce it’s policies until substantially after the fact. Remember–this video doesn’t involve copyright infringement, so no DMCA take down. It doesn’t involve acts protected by the Communications Decency Act. The issue is what lead Google to decide to take down this particular video and other videos it has removed for the same reasons.
What changed? Wait…isn’t that what Mississippi Attorney General Jim Hood asked about in his subpoena?
Electronic Frontier Fondation disagrees. “*&#$&^@!!!!”
So let’s see…. Human Rights are interfering with our freedoms? Help me out here. I guess you have to be a lawyer to understand this logic.
[Editor Charlie sez: This interview first appeared in a 2 part series in the Huffington Post . It is also available as a podcast. This series continues the Guide to Music Performance Royalties Part 1 and Part 2.]
Background: As we developed in Parts 1 and 2 of this series, there is an important distinction between songs and recordings that is frequently lost on the public. When you hear a recording of a song, there are actually two distinct copyrights involved, the song (also called a “musical work”) and the recording of the song.
When recordings are played on terrestrial radio, the writer of the song gets a royalty and the performer of the song on the recording gets nothing (neither does the record company). Almost every other country in the world besides the U.S. recognizes a performance right for recordings so that the artist does get paid for radio or internet airplay. (See the “I respect music” campaign and petition and our interview of campaigner, recording artist and entrepreneur, Blake Morgan.)
U.S. law changed in 1995 to pay a royalty for digital transmissions of certain kinds (satellite and Internet radio), and SoundExchange collects those royalties. If you are a featured artist or sound recording owner you can register at www.soundexchange.com.
The following chart extends the chart we started developing in this series and adds the “post digital” column and digital royalty column.
Note that the term “LOD” in the Record Producer box refers to the “Letter Of Direction” that artists sometimes send to SoundExchange authorizing the organization to pay a share of the featured artist’s performance royalties to a producer. While individual producer rates will vary, the LOD is pretty typical “custom and practice”; the law only requires that performance royalties are paid to featured artists, non-featured artists and sound recording copyright owners. The producer’s share percentage is negotiated by the producer as part of the producer’s engagement by the artist and is usually expressed as the producer’s royalty (say 4%) divided by the artist’s royalty, including the producer’s royalty (say 16%). In this example, the producer’s LOD would provide for the producer to get 4/16ths or 25% of the artist 45% share of royalties collected by SoundExchange. (Engineers, mixers or remixers who receive a royalty can also negotiate for a share of the featured artist performance royalties.) The rate in the SoundExchange LOD typically tracks the producer’s share of flat fee income (e.g., master use fees). See Record Producer Agreements: Accountings and Producer Letters of Direction.
Just to be clear, this chart and explanatory material does not come from SoundExchange. It is something I created to help explain the high level division of royalties.
|Post-digital income (Post 1995/1998)||
Digital (non-interactive webcast, Simulcast)
Physical (CD, Vinyl)
US Radio/TV (OTA)
Ex US Radio/TV (OTA) For US Writer/Artist
|Songwriter||Yes, PRO||Yes, mechanical from publisher||Yes, PRO||Yes, PRO||Yes, sync license from publisher|
|Music Publisher of Song||Yes, PRO||Yes, mechanical||Yes, PRO||Yes, PRO||Yes, sync license|
|Recording Artist (“Featured”)||Yes, SoundExchange||Yes, from record company||No||No (unless qualified see PPL)||Yes, master use from label|
|Featured Recording Artist if Sound Recording Owner||Yes, SoundExchange||Yes, from aggregator or distributor||No||No, unless qualified (see PPL)||Yes, master use (often all-in fee)|
|Session Musician/Vocalist||Yes, SoundExchange||Yes, from union||No||No (unless qualified see PPL)||Yes from union|
|Record Producer||Yes, artist share from SoundExchange (if LOD)||Yes from artist||No||No (unless qualified see PPL)||Yes from artist|
|Record Company||Yes, SoundExchange||Yes from sales or license||No||No (unless qualified see PPL)||Yes, from master use|
To help you understand more about the performance royalty for sound recordings and the role of SoundExchange in collecting and paying , we were able to interview Mike Huppe, the President of SoundExchange.
MTP: Tell us a little about SoundExchange. I think a lot of artists and musicians are unclear about what SoundExchange does, so perhaps you can explain how the digital performance royalty for sound recordings in the U.S. came to exist and what is involved.
Huppe: SoundExchange has been collecting performance royalties for sound recordings since 1995. To give a little background, most people in the U.S. are aware of entities like ASCAP, BMI and SESAC. For decades those groups have collected performance royalties for musical works [or songs] — the actual musical notes and lyrics that a songwriter creates. Until 1995, the sound recording side of the business, meaning the recording most people would recognize on the radio or on the internet, did not have performance rights in this country.
In 1995, for the first time ever in the U.S., the Congress established a performance royalty and a statutory license for the sound recording for certain types of digital transmissions. SoundExchange was entrusted with the collection and payment of those performance royalties. We administer a statutory license under the U.S. Copyright law, which means if a service like Pandora or iHeart Radio wants to stream a sound recording digitally, they can either obtain individual licenses from 5,000 rights owners or take advantage of a government license. According to federal law, that service would then simply file a two-page paper with the Copyright Office, meet the terms of the statutes, and then send their royalties and data every month to SoundExchange.
MTP: Just to give some perspective, how much money has SoundExchange distributed?
Huppe: To date, SoundExchange has distributed more than $2 billion in total. In 2013, SoundExchange distributed approximately $590.4 million in royalties — that’s enormous growth since our distribution of $20 million in 2005.
We’ve had tremendous growth over the past 3-4 years as a result of a variety of factors which include an increase in the rates in 2006-2007 and a radical shift in the way people consume music. More and more people are accessing music through digital devices, mobile devices and through streaming content rather than downloading it. We’ve seen explosive growth–comparing 2005 to 2013, total payments increased over 2000%.
MTP: I still run into artists who have never heard of SoundExchange, what do you do to encourage artists and sound recording owners to register?
Huppe: That’s a great question and you are absolutely right. SoundExchange’s name recognition and brand is certainly more recognizable now than it was 10 years ago, but you are correct there are people who don’t know who we are or confuse us with some of the other performance rights organizations, not recognizing that these other groups collect for a completely different right — for the song instead of the actual sound recording.
We do a lot in our effort to reach artists and rights owners. Every month, we get reports from people that we’ve never heard of, and who have never heard of us. Outreach is an ongoing effort, but the money comes to us, and it’s our job to find and ensure these individuals to sign up.
On first impression, we sometimes hear from those that haven’t registered that SoundExchange royalties “sound too good to be true.” Understandable, but we have a dedicated team of staff who are focused solely on tracking down performers and labels to get them to claim their money. We try to track and contact them through a variety of methods to get them to register, including: regularly placing ads in print and online news outlets; targeting individuals via social media channels like Twitter, Facebook and YouTube; speaking on panels; sponsoring events or exhibiting at tradeshows. We host regular “how to register” webinars; and have even coordinated with music conferences, like at SXSW, where we put up large banners and hand out flyers with band names asking them to register.
In addition, we’ve partnered with various industry organizations such as AFM, SAG-AFTRA, MySpace, CD Baby, HFA, among others to match their lists against ours and conduct email, mail campaigns — all with the message: “Do any of you know these people? If so, can you please contact them?” We are perfectly open to those third-parties doing the branding and getting the benefit of finding money — we just want to ensure the creative community gets paid for their work. We executed over 150 matches in the past few years resulting in tens of thousands of emails to various folks sharing that SoundExchange has money for them. We are quite confident that we are doing more than our fair share of reaching out and contacting those we owe money to, because it’s the right thing to do.
The real reward is when we register that individual or band where the money truly makes a difference. Approximately 80% of the checks SoundExchange sends out are for less than $5,000. We often hear from artists who express gratitude that we found them or those who might have registered with us, and forgot until they receive a check in their mailbox.
MTP: How many services use the statutory license and how many people does SoundExchange pay royalties to?
Huppe: Currently, we collect digital performance royalties from more than 2,000 services that send SoundExchange monthly reporting logs and payments. We take the data from all those services, clean it up, match it across various algorithms, sort it across numerous payees and then every quarter send out anywhere from 18,000-25,000 checks to all the registrants who come through SoundExchange to collect their money. As of today, we have more than 100,000 artist and record label accounts. When the money comes in, 50 percent of money goes to record labels or whomever owns the master and the other 50 percent goes to the performer — 45 percent goes to the feature performer and 5 percent to non-featured. We pay performers directly, regardless if they are recouped through their record label.
[MTP: That last point is very important because artists, particularly artists who are no longer signed, can be unrecouped and might not be entitled to royalties under their recording agreements. SoundExchange pays the statutory royalty to these artists without regard to whether they are recouped under their old or current record deals.]
MTP: Where do you see SoundExchange in the next 5 years?
Huppe: I am very excited about where SoundExchange is going. We are a very interesting and unique organization — certainly unlike any other in this country. We’re optimistic about where the music industry is headed and see opportunity for SoundExchange to help digital music services thrive.
SoundExchange is currently one of the top digital revenue sources for most record labels in the U.S. We are growing fast because of all the ways music usage is changing. What we do is increasingly being relied on as a revenue stream for performers and record labels alike. SoundExchange checks have become a very real source of income, and it’s exciting to hear from those who are grateful for what we do.
Although we squabble over royalty rates with the service providers, we view ourselves as partners that enable music service to do what they do best — creating new ways to listen and discover music. In the long run, we want them to succeed. It’s in their best interest, our best interest and the best interest of the consumer to have a very full and vibrant webcasting market. We want them to create new business models, new ways of listening to music and we feel that SoundExchange enables all of that. We are the back office to a lot of these new business models emerging on the web.
In the next five years, we see ourselves growing, providing an important role in some of these business models and we hope to continue to increasing digital royalty payments (remember we went from $20M in 2005 to $590 million in 2013). One of our main responsibilities is fighting for the long-term value of content — a battle we will never shy from. We believe that content is critically important, it is the backbone of many music services and what they provide. Content is the blood and sweat of the performers and the investment of the record labels. We are constantly fighting to maximize the value of content so that those folks can get paid for all the revenue they bring to services.
We will also have an authoritative repertoire database in place that will not only be a resource to the industry so that people can go and find out about the ownership of sound recordings, but also to improve the tracking of collections and more timely payments. We are also in the process of rebuilding our technology and distribution platform in order to scale better and handle the explosive growth. Once we complete that platform I believe there are many other services SoundExchange can provide to the industry beyond processing this license. The possibilities are endless.
We are very excited about where we are headed and what we can do for the industry. And again, the fact that we are a non-profit, the fact that our board represents artists, unions, independent labels and major labels really makes us uniquely positioned to do these things for the greater good of the industry.