Google’s Muscle-Based Defacto Compulsory License: What About We Don’t Like You Don’t They Understand?
The wisest among you learn to read your portents well
You know there’s no need to hurry, it’s all downhill to hell…
GMR Formed Out of Pandora Lawsuits Against Songwriters Affiliated with ASCAP and BMI
Yes, the portents are in the water–there will eventually be a showdown with Google (and probably Pandora, too) over the songs they routinely infringe in the name of “permissionless innovation.” Whether it is today or tomorrow, that day is coming, and by the looks of it the first collision will be between Google’s bully boys and songwriters represented by Global Music Rights, the new PRO backed by Irving Azoff.
The why of all of this is pretty simple: The unelected ASCAP and BMI rate court judges have decided that the government’s consent decree says that the only way songwriters can license their digital rights under a direct license is to withdraw entirely from ASCAP and BMI. That’s right, the intellectual elite in a faraway Eastern city decided that the consent decrees–drafted before the Internet existed–require a songwriter to withdraw from these PROs entirely in order to license rights for the Internet.
So some songwriters did withdraw from ASCAP and BMI and started a new PRO called Global Music Rights–a PRO that is not subject to the fiat decrees of the ASCAP and BMI rate courts (like SESAC is not). In other words, these writers did what the court said they had to do. To the letter.
Enter YouTube, Google’s Monopoly Video Search Service and the Arrogance of Monopoly
Google’s monopoly YouTube video search service has already demonstrated its willingness to use the DMCA as a shakedown threat against indie labels over Google’s Music Key service. Those tone deaf bully tactics have landed Google in an antitrust dispute with indie labels in Europe. Given Google’s complete mishandling of the antitrust case against them in Europe in general, Google managed to step in in yet again and now have a whole new antitrust case involving YouTube alone giving weight to the desire at the European Parliament to see Google broken up justified by its abuse of monopoly power.
YouTube’s argument with the indies was that if you refuse to license to us on MusicKey because you don’t like the commercial terms, then we will let the “user generated” versions of your records flow through YouTube and force you to take them down one by one forever. This is essentially the same situation on records that Google is now putting GMR in on songs.
YouTube (and-presumably-the new Music Key service) has licenses with ASCAP, BMI and probably SESAC. Not with Global Music Rights, however. So when the writers in Global Music Rights moved over, they sent a notice to YouTube that YouTube needed to get a license with GMR or stop using the music–also known in the DMCA trade as red flag knowledge. Lots and lots and lots of red flag knowledge.
And here’s the twist. The consent decrees require ASCAP and BMI to issue a license immediately to anyone who wants to use their catalogs (Section IX of ASCAP’s consent decree and Section XIV of BMI’s consent decree, for those reading along). So even if, say, MusicKey, doesn’t have an actual license with ASCAP and BMI, if MusicKey has sent the right notices, then MusicKey can use songs represented by ASCAP and BMI and negotiate a deal. This is one of the very big points of contention in the review of the consent decrees by the Justice Department and was the basis of Pandora’s lawsuit against ASCAP and BMI songwriters.
But–if you are not subject to one of those consent decrees–like GMR writers, apparently–there’s nothing that compels you to license.
Let me say that again: If a songwriter is not subject to either the ASCAP or BMI consent decree, there is nothing that compels that songwriter to license at all. Ever. Unlike the compulsory license for mechanical royalties (which itself may not be long for this world), there is no compulsory license for performance rights.
Business as Usual for YouTube
So YouTube is confronted with this situation. And how do the smartest guys in the room decide to handle it? The usual.
They tell some of the top songwriters in the world (and Irving Azoff) to fuck off.
Why? Two principle reasons. First, YouTube wants GMR to provide evidence that the songs were withdrawn from YouTube’s licenses with ASCAP and BMI. These would be the licenses that GMR is not a party to but..YouTube..is. So wouldn’t it be more appropriate for YouTube to pass GMR’s letter to the PROs and ask them?
That assumes that YouTube isn’t able itself to confirm what rights it licensed–or more likely is trying to put that burden on GMR, who is not a party to YouTube’s licenses. Surely a company like Google that unilaterally assumes the mantle of organizing the world’s information would be able to know what rights it licensed from the PROs? There are some twists and turns here, depending on whether GMR represents 100% of the song, etc., but that’s still a reason for YouTube to go look it up.
This insult is compounded by the fact that Google bought a company called RightsFlow that managed somehow to get some version of song splits for a bunch of songs that it may or may not have owned the data for, and then promptly sold that information out the back door to Google for the great enrichment of RightsFlow at the expense, in my view, of the songwriters whose data was being sold (and Rightsflow’s principals so enriched now appear to be quietly waiting out the statute of limitations). So in a way, YouTube’s position adds insult to injury as they already have a considerable amount of this information and should be in a position to find out whether GMR has correctly withdrawn, if for no other reason than they probably have the data already based on the Google fox guarding the Rightsflow henhouse.
The DMCA As A Sword: Here Comes the Okey Doke
Just like when the indie labels had the audacity to actually want to be treated fairly, YouTube pulls out the DMCA notice and shakedown. This should come as no surprise because Google’s entire business model is based on the DMCA notice and shakedown.
When YouTube goes for the DMCA okey doke this time, here’s the threat: Pull out of the ASCAP and BMI licenses and refuse to license Google? Then we will continue to use your music–notwithstanding Google’s sainted ContentID content management system that could block unlicensed music before it goes up on YouTube–and wants GMR to buy into the DMCA notice and takedown process–you know, the one that produces notices at the rate of a million a day or so that Google has infringing links in search alone. In other words, Google wants GMR to stop them before they infringe again.
According to the Hollywood Reporter:
That’s quite upsetting to Azoff, who is prepared to launch an all-out legal war if negotiations don’t prove fruitful and if YouTube refuses to remove the works. Why YouTube and not, say, Spotify? “Because they are the ones that have been least cooperative and the company our clients feel are the worst offenders,” Azoff tells The Hollywood Reporter. “It’s also their attitude.”
And that, gentle readers, is a lot more temperate than I would be. Particularly after a lot of gratuitous nasty that stops just short of calling GMR’s lawyer a liar. (Which might make one ask what is it in the history that makes this so personal for Google or its lawyer.)
Welcome to Google’s Version of the Hotel California
But this tees up what I would suggest is the real issue–does Google care so little about the top songwriters in the world that it fully intends to continue infringing on their rights and monetizing their works for Google’s own benefit while twisting their rights in knots.
Even though these songwriters have entirely complied with the rate court fiat.
Ask yourself this question–if Google does this to the top songwriters in the world, what will they do to anyone else? And why should any of us do any business with them about anything or help them in any way?
And then ask yourself this: Why should any of these writers–who frequently are also producing the tracks they write–ever agree to work in situations that their rights aren’t respected?
Here’s an example of what happens with songs on YouTube.
YouTube routinely distributes sex tourist videos (if you don’t believe that, try searching YouTube for appropriate key words). We posted for quite some time about a particular one using the music of Jack White monetized by Asian “dating” advertising served by Google as well as ads for Apocalyptica.
And remember–this is not a rogue site offshore with some “room of mirrors” ad serving platform. This is YouTube where all of the ads are by Google and are served indiscriminately–including to kids.
YouTube eventually did take this video down and missed out on the Asian dating ad revenue–because Beggars had to file a DMCA notice. This is what Google’s lawyer wants GMR to do. Search for all uses of your songs on YouTube and block them one by one. Can you blame anyone for thinking that this is an absurd distortion of the law? Can you find a Member of Congress who is willing to claim that this was exactly their intent?
The GMR complaint is also timely for a different reason: Congress is currently trying hard to pass the Stop Advertising Victims of Exploitation Act of 2014 (or the “SAVE Act”) to stop Google and others from profiting from online advertising of human trafficking like they served against the sex tourist video using Jack White’s recording and song.
It will come as no surprise that the bill is meeting opposition from Google and others. According to the Daily Beast:
Lawmakers are trying to pass a landmark bill to halt child trafficking, but congressional aides say it is facing resistance from big tech companies that have launched a stealth campaign to fight the legislation….Both human trafficking and forced prostitution are already illegal. But what Sen. Mark Kirk and Rep. Ann Wagner, who are pushing the initiative in the Senate and House, respectively, seek to do is create liability for those helping make the connection between pimps and johns….
“The Googles of the world are in a tough spot. They’re not going to speak out publicly against a human trafficking measure. But they also are opposed to it,” said a Wagner legislative aide. According to the aide, negotiations with tech associations usually lead to suggestions that legislation enhance penalties for pimps or johns, rather than online advertisers.
The SAVE Act failed to pass the Senate in the last session of Congress, by the way, so Google got away with it again.
This is the kind of dreck that Google’s lawyer wants songwriters to protect the world against, while Google profits until they are caught. And remember, this is not happening on some obscure rogue site, this has nothing to do with SOPA, this is happening right here at home on YouTube–right here in your home, actually–totally within Google’s control.
For songwriters, Google’s world is like the Hotel California–you can check out any time you like, but you can’t ever leave. And your choices are take the king’s shilling or the king will take it all for himself. And then send the bully boys after you if you complain–with instructions to rid the king of these meddlesome songwriters.
In a research note sent out Tuesday, JPMorgan’s Doug Anmuth lowered estimates for Google’s revenues, citing concerns with “the transition from desktop to mobile search, continued margin compression, and increasing competition from Facebook.”
Shortly after the note went out, Google stock hit a 52-week low.
That was not a huge surprise.
Quartz also chimed in, now with even more pessimism:
“We are concerned about the disintermediation of search by apps and this could impact core search growth. While this is extremely difficult to quantify, qualitatively, we believe that consumers’ increased dependence on mobile and apps is negatively impacting GOOG’s core search.” So begins Macquarie’s “bottom line for 2015″ for Google.
Macquarie is the latest in a string of investment banks to strike a note of caution when it comes to Google. Also last week, JP Morgan revised its estimates for Google’s stock downwards, from $670 to $600 per share. (Google closed at $516.35 on Dec. 19.) “We are lowering our estimates on Google for 4Q14, 2015, and 2016 to account for slower organic growth, continued strength in the USD, and ongoing investment opportunities,” analysts wrote in a research note to clients.
As we’ve noted before on MTP, Google has often underperformed not only the market but also the “Gang of Four” as Eric Schmidt calls the GAAF oligopoly (Google, Apple, Amazon and Facebook).
Every picture tells a story–Google is the blue line 4th from the top, outperforming Amazon (which is not surprising) and underperforming other GAAFers Facebook and Apple, not to mention the S&P 500:
Why? Maybe it’s because of Google’s Internet of Too Many of Other People’s Things.
The erudite Kristen V. Brown writing in SF Chronicle tells us that “Pandora tries to woo musicians with data, not royalties“, but it turns out that another Pandora charm offensive is failing. The one thing that Pandora could easily do that wouldn’t cost them a dime is of course too valuable for them to give away to the artists they are screwing–let fans connect with directly with the artists they love.
What is the one bit of data that is (A) most valuable to anyone selling a product online and (B) something that almost every artist already has?
Fan emails that artists could add to their often very well tended email lists. A zip code would also be nice. Almost every band has an email sign up list on their website (assuming they have a website other than Facebook, which is a whole other issue).
Here’s what’s not valuable: Heat maps showing you are getting streamed in Biloxi, Tucumcari and Yellowknife and that’s exactly what Pandora is offering. (Try routing that tour.) Extraordinarily aggregated data that tells you everything and nothing at the same time brought to you by people who have never humped a trap case.
This may have worked back in the early 00s when record company new media execs would buy almost anything that said Internet, but no more. Everyone is wise to this scam. And want to bet that this level is just the tease and they either try to get you to take a lower royalty or simply pay in order to get the good stuff–if they even have any good stuff?
Ms. Brown tell us:
So far, few musicians have been wooed by Pandora’s olive branch.
At Pandora headquarters this month, Leftover Salmon guitarist Vince Herman wanted to know how the band could improve its Pandora numbers.
Leftover Salmon has had a good relationship with Pandora. The company often trumpets the exposure that Pandora brings to artists, since an algorithm selects what its 75 million listeners hear, rather than the listeners themselves. Leftover Salmon isn’t a band that has radio hits — but it has more than 400,000 monthly listeners on Pandora.
At first, Herman was enticed by the data. He even opened a show for Pandora employees with a data joke. “This is a little bit different than our demographic,” he said. “You should really be 70 percent male. We’re making progress already.”
But a few days later, he came to reconsider the value of the numbers. They mostly confirmed what the band already knew about its fans. They weren’t detailed enough to provide greater insight.
And they didn’t change the band’s core concern — that Internet music streaming companies simply don’t pay artists enough.
“You go to the bank to check your bank account, and maybe they give you a free cup of coffee or let you open a savings account for free, but there’s still just $3 in the account,” he said. “It doesn’t change the bottom line. Pandora should be paying musicians more for what they built their company on.”
Exposure, after all, doesn’t pay the bills.
Here’s what Pandora could easily do for artists (and why they won’t). Pandora could at relatively low cost put a button on the “Now Playing” page right next to the Facebook share button that said something catchy like “Connect”. Clicking that button would take the fan to the artist’s email sign up on the artist’s website and the fan could sign up or not.
The fan then can decide where to go next, including back to Pandora, where they probably will return eventually.
And it’s that decision that will create the biggest pushback from YouTube, Pandora, Spotify or any of the other platforms that could do the same thing I’m describing. Internet product folk absolutely hate the idea of letting consumers make such choices (not withstanding Google’s “one click away” BS).
Maria Schneider is on the right track here:
Maria Schneider, a composer and Big Band leader, said that data can be extremely useful to artists trying to squeeze profit from the shrinking margins of the industry, allowing them to better plan tours, set strategy for album releases and connect with fans. But the information provided by Pandora, she said, is useless.
“If Pandora wanted to help, they’d reveal exactly who those fans are, so that the music creator could develop direct relationships with their fans,” she said, rather than giving the artists just basic information like a fan’s age and where they live.
I would suggest that allowing fans to choose to sign up would be an easier work around that would also work on all music platforms anywhere in the world. The disclosing part can get tricky, especially in countries that actually protect consumers. Maria’s coming from the right place with good intentions, but I’d suggest that the minor repair of making the “Connect” button available for fans to use voluntarily would go a long way to avoiding any pushback based on privacy concerns (that only seem to come up when some tech companies are trying to protect consumers from other tech companies (see “Do Not Track”).
But count on Pandora, YouTube, Beats, Spotify et al to oppose this simple idea that would actually convey something of potential value to the artists these New Boss companies profit from. Thanks to Kristen for getting out the truth.
Strange Similarities between ACLU and EFF letter and Center for Democracy and Technology Memo on COICA
A blast from the past…since we’re so interested in who wrote what for whom these days.
Artist Rights Are Human Rights
As we noted in “No Money For Old Pirates: Working People Unite In Support for Sens. Hatch and Leahy S.3804”, the headline for 2010 is the unification of working people and their unions in fighting piracy. The Songwriters Guild of America, the American Association of Independent Music, and the AFL-CIO, AFTRA, DGA, SAG, IATSE and the AFM all have stepped forward and brought their advocacy to bear on legislation that protects workers rights.
This should not come as a surprise—artist rights are widely recognized as human rights. In Artist Rights are Human Rights we said:“These human rights are transcendent and timeless expressions of fundamental entitlements of humanity that safeguards the personal link between authors and their creations as well as their basic material interests. These rights are personal to the authors and artists concerned and are arguably of broader scope than the rights that…
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As MTP readers will recall, in 2011 Google was able to buy their way out of a criminal prosecution for violating the Controlled Substances Act. The price? Chump change for Google, but it sounds like a lot of money: $500,000,000.
Perhaps more importantly, Google promised not to do it again in a nonprosecution agreement (interesting reading here) that kept its senior executives from being indicted. Tell that to the prisoners of mandatory sentencing.
It’s also important to realize that the prosecution by US Attorney Peter F. Neronha was the culmination of a multi-year and multi-agency sting operation. (See Wired’s recent coverage of the complex sting, “Drugstore Cowboy” for more background. Google has done an excellent job of suppressing press coverage of the entire episode, so you will have a hard time finding anything about the multi-billion shareholder lawsuits against Google’s senior executive team, including Sheryl Sandberg–yes, that
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How Spooky Is It? YouTube Pushes Jihadi Recruitment Videos While The Internet Association Tells Us Washington is “Spooky” for the Internet
A blast from the past for the holidays…
Every now and then I get these absurdly childlike emails from the Internet Association (which is yet another Google-dominated lobbying group in Washington). Here’s the latest:
If what gets you up in the morning are patent trolls, you’re probably not going to relate to this next bit very well. But here’s a thought about what “rules” might apply to YouTube since they don’t seem to have any standards and practices except “catch me if you can.”
Monetized jihad recruitment videos with 1.6 million views. And how are they monetized?
This playlist has a variety of jihadi recruiting videos on it, some of them with English subtitles, and all of which have substantial numbers of views.
The Ridley Scott movie “Kingdom of Heaven” is a popular source of imagery (although only a mere 400,000 views):
So the question is, who gets the money from YouTube’s advertising on these videos? Aside from…
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