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Archive for March, 2014

The MTP Interview: David Lowery on artist rights

March 23, 2014 1 comment

A blast from the past:  My extended interview with David Lowery about the formation of his Trichordist blog, the “Letter to Emily”, and more.

Theme music by Guy Forsyth, “Where’d You Get the Music?”

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A casual example of how Google profits from lyric piracy and screws songwriters

March 21, 2014 Comments off

Music Technology Policy

I just happened to get a call from a songwriter about an illegal use of the lyrics from his songs.  Thus we found http://www.lyrics007.com registered in–wait for it….China.  Statshow estimates the monthly revenue is $41,000.00, 112,000,000 annual visitors and Google indexes over 600,000 pages.

After a little poking I found that Lyrics007 has just about any song you would want and–I know this will come as a shock–plenty of advertising.  Served by?  Google, of course.  In fact, we saw plenty of ads for Google Play itself as well as YouTube partner promotions.

Little Big Town promotes Google Play and McDonalds as well as some drug ad for birth control:

Not only that, but Google is serving this illegal site ads for the H20 Festival and the Warped Tour to help a pirate site stay in business–oh, and make money for Google, of course.

And you know where the AdChoices “Free Music Download” ad goes to?

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Hannah Holbrook (@Hannahholbrook)

March 21, 2014 Comments off

Why Can’t Songwriters Audit? A Brief Guide to Statutory Audits Under the U.S. Copyright Act

March 19, 2014 2 comments

BLANCHE

Whoever you are…I have always depended on the kindness of strangers.

From A Streetcar Named Desire, by Tennessee Williams

Songwriters earn a sizable percentage of their ever decreasing income from mechanical royalties.  Until the last few years, mechanical royalties were almost always licensed under direct licenses to record companies that incorporated by reference the statutory license provisions of Section 115 of the 1976 U.S. Copyright Act and the corresponding regulations.  Section 115 is a direct–and almost word for word–descendant of Section 1(e) of the 1909 U.S. Copyright Act.

Why so little change in nearly 70 years?  Until 2000 or so, nobody used statutory licenses except in the rarest of circumstances.  Instead, the statutory license became something like the Uniform Partnership Act or the Uniform Commercial Code.  It could be used for reference but was often–almost always–modified in a direct license.

The main point that was added in these modifications was the right of songwriters and publishers to conduct an audit of the licensee, usually a record company (more properly, audits are called “royalty compliance examinations”).  Why did that provision need to be added?

Because it is not in Section 115 of the 1976 Act and it is also not in Section 1(e) of the 1909 Act.

The statutory substitute for an audit is frequent accountings–monthly accountings to the copyright owner certified by an officer of the record company and an annual statement certified by the record company‘s CPA.  Since the entire record company royalty accounting systems are designed to account for record royalties on a semi-annual basis or quarterly at best, the threat of monthly accountings for mechanical licenses drove record companies to direct licenses with an audit right.  (Not to mention that it became increasingly common for artists to write their own songs and monthly accountings for mechanicals paid to those artists would inevitably lead to an argument about monthly record royalties, too.)

Enter the Internet.  Starting around 2000 or so and at an increasing rate ever since, online retailers began using statutory mechanical licenses for streaming services.  (Of course, there was no rate for streaming mechanicals until 2009, but that’s another story.)  Online retailers discovered something very important about statutory licenses for streaming mechanicals–nobody could audit them if they complied with the license.  Fast forward to 2014–digital services send hundreds of thousands if not millions of statements under Section 115 statutory licenses and Ebenezer Scrooge, CPA signs annual statements of account for every one of them with the certification that no one believes.

And no one can ever check whether the service has given songwriters a straight count.  So like Blanche Dubois, songwriters are forced to depend on the kindness of strangers.  They can’t opt out because the government forces them to license, but they can’t check if they are paid properly because the government won’t let them.

What is odd about this is that there are several other statutory licenses in the U.S. Copyright Act and guess what?  All of them require a royalty compliance examination of the licensee.  Here’s a high level thumbnail guide to those provisions–as you’ll see, songwriters are the only ones asked to depend on the kindness of strangers.

 

Royalty Audits For Statutory Royalties Under the U.S. Copyright Act

 

 

US Audit Rights

Mechanical

Webcasting

Cable

Audio Home Recording Act

Copyright Act Code Section 115 114 111(d)(6) 1003(c)(3)
Code of Federal Regulations Sections 37 CFR 201.19 37 CFR 380 37 CFR 201.16 [Interim Rule] 37 CFR 201.30
Who can audit? No one SoundExchange (“the Collective”) Copyright owner or a designated agent that represents a group or multiple groups of copyright owners An interested copyright party or an authorized representative
Who can be audited? No one A person who has obtained a statutory license under 17 U.S.C. 114 or 17 U.S.C. 112(e), but who is not a Broadcaster or a Noncommercial Educational Webcaster A cable system whose secondary transmissions have been subject to licensing under 17 U.S.C. 111(c) “Filer” – a manufacturer or importer of digital devices or media who is required by 17 U.S.C. 1003 to file Statements of Account with the Copyright Office
Does the statute of limitations apply (how far back can they audit)? Not applicable Three years Not specified Three years
Who bears the cost of the audit? Not applicable SoundExchange, unless the final determination reveals an underpayment of 10% or more Not specified Copyright owners, unless there is an underpayment of 5% or more. Cost is paid from amount owed when less than 5% underpayment
What are the record keeping requirements? Compulsory licensees must keep their records for three years from the date of service of an Annual Statement of Account Licensees and the Collective must keep books and records relating to royalties for three calendar years Not specified Statements of Account must be filed with the Register of Copyrights Office quarterly and annually

Did Slate Sell it’s Journalistic Integrity to Google -oops I mean New America Foundation Which is Run by Google Lobbyist?

March 19, 2014 Comments off

The indomitable @sutterink flattens the suits from Google

The Trichordist

The Interwebs have been  buzzing about a pair of articles on the once great Slate.com.

It began with the  posting of a “news” article on Slate by Google Lawyer Marvin Ammori in which he compared entertainment creators to a stalkers.   Adland.tv quickly pointed out to Slate Magazine that they had not made the proper disclosures.  So slate added this to the article:

Update, March 11, 2014: Disclosure: The author represented Google and other companies fighting SOPA/PIPA in 2011 and 2012. He currently represents Google and other companies on several issues, including copyright reform. These views are his own.

Translation: oops we accidentally published a piece of corporate PR propaganda crap.

Next  comes the hilarious follow up to this article by Kurt Sutter the writer/creator of Sons Of Anarchy. In a blistering and brilliant attack Sutter takes Ammori and Google to task for relentlessly undermining creators rights to enhance their bottom line.

“I Created…

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Update: Beastie Boys Settle with Goldieblox: More grace than Goldieblox deserved

March 17, 2014 1 comment

“Put all your eggs in one basket, and then WATCH that basket.”

From Pudd’nhead Wilson and Other Tales by Mark Twain

At the intersection of “Too Cute By Half” and “Stupid Stanford Tricks,” we find Silicon Valley darlings, Goldieblox.  What do they teach them at Stanford, anyway?

In a gracious–and supremely undeserved–act of kindness, the Beastie Boys agreed to dismiss the lawsuit (Goldieblox Dismissal) that Goldieblox brought against them.  If I had to guess, I would guess that the paying party was probably not just Goldieblox, but that’s because I always thought that Goldieblox was engaged in marketing by lawsuit and got extraordinarily bad advice.

The unanswered questions in this case are many, but I think they’ll just have to go into that mysteries of life pile unless Goldieblox just cannot keep it buttoned and there’s a better than 50/50 chance of that.

First, what did Intuit know and when did they know it?  My hunch?  A lot, and early on.  Another question is what did YouTube know, when did they know it, and who was in on the early viral activity of the Beastie version of the video on YouTube.  My hunch?  A lot, early on, and many, many YouTube executives.  You know, marketing by bot.

Another question:  Who is paying the legal fees of the Google legal team that suddenly appeared when Goldieblox decided to change their lawyers.  Who fired whom and over what?

But here’s the question that will produce repeat usage for artists and songwriters in the future, particularly in California (where Google loves to sue):  Does the typical Google DMCA safe harbor shakedown work against right of publicity, unfair competition and implied endorsement claims?

My hunch?  It doesn’t.  Google definitely did not want anyone making any law about that.  And that’s why I noted in a 2006 post on these pages that the DMCA is Google’s Maginot Line.  They’ve put all their eggs in the DMCA basket.

And they’re going to WATCH that basket.

UPDATE:

Goldieblox published an “apology” on their company website.  Was it above the fold?  No.

goldie1

Was it on the second page?  Nope.

goldie2

How about page 3?

goldie3

No–after you scroll through all of the Goldieblox products, then you see a proper post labeled “APOLOGY TO BEASTIE BOYS” or something like that so you’d know what it was.

No, no, no, no, no, children.  This is GOLDIEBLOX we are discussing, this is DARALYN DURIE, this is SILICON VALLEY where money means only having to say you’re sorry.

Page 4 looks like this here:

goldie4

That block of text there with no heading, no identifier, no reference point, buried 4 pages down–THAT’s the apology.

goldie5

And in case you can’t read it, here’s what it says in case you ever wondered what the gnashing of teeth LOOKS like:

We sincerely apologize for any negative impact our actions may have had on the Beastie Boys. We never intended to cast the band in a negative light and we regret putting them in a position to defend themselves when they had done nothing wrong.
As engineers and builders of intellectual property, we understand an artist’s desire to have his or her work treated with respect. We should have reached out to the band before using their music in the video.
We know this is only one of the many mistakes we’re bound to make as we grow our business. The great thing about mistakes is how much you can learn from them. As trying as this experience was, we have learned a valuable lesson. From now on, we will secure the proper rights and permissions in advance of any promotions, and we advise any other young company to do the same.
And this, you see, is the final screw you to the Beastie Boys because that very last sentence is the killer:
From now on, we will secure the proper rights and permissions in advance of any promotions, and we advise any other young company to do the same.
For those of you reading along, the very worst thing that any Silicon Valley company can do is acknowledge that asking permission is even a concept that touches them.  Remember how the little EFFers and CCIA tykes went absolutely batty when David Lowery said that asking permission and doing unto others are the foundations of civilization?  While they may not be in the form of the Ten Commandments or the Gospel According to Luke, I would bet that you will find these concepts in the core belief systems of every race and creed on Earth.  (The Golden Rule?  Maybe they heard of it.)
But note they say “we advise any other young company to do the same.”  Because when you grow up to be big and strong like Daralyn Durie’s client Google, you can jack anybody around who you choose, starting with authors and artists.
Bad people, bad, bad, bad human beings.

Digital Citizen Study on Ad Sponsored Piracy

March 17, 2014 Comments off
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