Archive

Archive for February, 2016

More Fancy Stuff From Spotify Against David Lowery

February 17, 2016 Comments off

I’ve been reading over Spotify’s papers filed in response to David Lowery’s lawsuit against the company and noticed a couple of things.  One that is hiding in plain sight, so to speak, the other that is quite a gloss on reality.

The Case of the Purloined Stream

Recall that Spotify has said several times that they want to pay “every penny” they owe songwriters, they just need to know who to pay.  (Leave aside for the moment that this is more “Fancy” Grade bullshit because they actually don’t need to know who to pay in order to rely on the compulsory license–they just need to send the U.S. Copyright Office a notice of their intention to rely on the compulsory under the plain language of  17 U.S.C. Sec. 115(b)(1)–“If the registration or other public records of the Copyright Office do not identify the copyright owner and include an address at which notice can be served, it shall be sufficient to file the notice of intention in the Copyright Office”.  While this may not be popular at the Copyright Office, I’m sure some accommodation could be worked out.)

Recall also that Spotify said in the company’s blog that:

[w]hen one of our listeners in the US streams a track for which the rightsholder is not immediately clear, we set aside the royalties we owe until we are able to confirm the identity of the rightsholder. When we confirm the rightsholder, we pay those royalties as soon as possible.

So why is it that the lawyers for Spotify did not inform Judge Beverly Reid O’Connell of their client’s action in the responsive papers?  That begs the question, what is different about a blog post compared to a court filing?

Perhaps it is because the lawyers filing the court papers have an obligation as officers of the court not to make a false or misleading statement to the Court?  Perhaps it is because the statement in Spotify’s blog post is not, strictly speaking….whatchamacallit…I guess you’d have to say “true”?

When Is A Job Not A Job?

Spotify’s lawyers are–quite understandably–throwing the Fancy against the wall to see how they can knock this suit out of the box in California where Spotify applied to do business as a foreign corporation:

spotify sec state ca

One way they can do this is to prove that Spotify has insufficient contacts with the judicial district where the suit is filed to permit the Court to assert jurisdiction over Spotify (sometimes called an “inconvenient forum”), a common delaying tactic.  Even so, it is becoming clear that Spotify wants to fight the case in New York.  Here’s an example of that argumentation:

Plaintiff’s complaint points to only one form of contact that conceivably reflects Spotify’s direction of contacts towards California in particular: Spotify’s two California offices. But those offices are irrelevant to specific jurisdiction, because they are not related to this lawsuit….Spotify’s two small offices in California do not fit the bill. They employ a total of approximately 50-60 employees. This is far less than the 450-500 employees located in New York, which is the hub of the company’s United States operations. All but eight of these employees work in roles unrelated to the content part of Spotify’s business….The majority of California employees work in advertising sales and of the few California employees who perform work related to the content side of Spotify’s business, not a single one is involved with music composition licensing—the subject matter of this litigation.

High level, Spotify argues that if the defendant in a lawsuit has not originated contact with the particular judicial district by actions related to subject matter of the particular suit, then the defendant may be able to have the case removed to a judicial district where the plaintiff has more relevant business contacts, New York in Spotify’s case.  Spotify is arguing that all the jobs that relate to Spotify’s publishing business are in New York–aside from the fact that Los Angeles is a major music industry hub and aside from the fact that the parent corporation of Spotify’s clearance agents the Harry Fox Agency has extensive offices in Los Angeles.

So remember–Spotify’s lawyers tell the Court that “not a single one is involved with music composition licensing.”

Imagine my surprise to find this job posting for a Los Angeles-based Director of Publisher and Songwriter Relations, North America on the Spotify website:

spot pub job

Particularly because the job description provides for the Director of Publisher and Songwriter Relations, North America to work on “reporting…finance and legal.”  A director level job often reports to a senior director or VP and has various managers reporting to the director.

Sounds like a pretty “Fancy” job.

So perhaps what the lawyers meant to say was “not a single one is involved with music composition licensing”–yet.

The Reality of Touring Revenue From Someone Who Has Done It For 32 Years

February 17, 2016 Comments off

The Trichordist

(I posted this on my facebook page 6 months ago. It continues to get shared so I’m updating and posting it here.)

It amuses me to no end when people suggest that artists can make up for recorded music revenues with live music revenues. These are people who obviously know little about the live music business. I’m sure the top 1% of touring artists can. But for most middle tier bands this is not a reality. The main reason lower level artists tour is that it is the most reliable way to stimulate sales of recordings! That’s what actually supports the middle class artist.

But there are other issues to be considered before comparing live revenues and recorded music revenues.

First of all: recorded music revenues are largely “net” while live music revenues are “gross.” You can’t equate revenues before expenses with revenues after expenses. Apples and oranges (*ahem* NY…

View original post 1,110 more words

Spotify’s Reply To @DavidCLowery: When the going gets tough, the tough get fancy

February 15, 2016 5 comments

And if they could talk to one another, don’t you think they’d suppose that the names they used applied to the things they see passing before them?”

The Allegory of the Cave by Plato, line 515b2.

David Lowery is leading a class action lawsuit against Spotify for failing on what appears to be a massive scale to do three crucial things: license rights, pay reproduction or “mechanical” royalties for songs it exploits, and fix Spotify’s deeply flawed song licensing and essentially nonexistent mechanical royalty accounting systems for the future.  Songwriter and recording artist Melissa Ferrick has separately brought a similar class action.

It’s A Mystery

We now have a legal response from Spotify to give us some idea of how Spotify wishes the world to view its excuse for its massively flawed song licensing practices.  And here is what it boils down to–because there has never been a “global rights database” in the history of recorded music, it is just impossible to know (1) who owns what, (2) what any song might actually be given similar song titles, (3) which songs might be in the public domain, and (4) how the music industry has managed to stumble along for the last 100 years is a mystery of biblical proportions.  And oh, by the way–any claim to class membership will be as complex to solve as the Happy Birthday case.  Because songwriting is, as Philip Henslowe might say, just a big mystery.

A mystery that justifies massive copyright infringement.

The Ontological Definition of Risk

One might think that the absence of such a database would be a reason that songs did not get exploited at all, for who could ever know anything about anything having to do with any song?

And since you couldn’t know, that is, because according to Spotify it is an ontological certainty that it is beyond human comprehension to acquire any concrete knowledge of the existence and form of any song, anyone wishing to use any songs without a direct license with a robust indemnification would have to be INSANE?

No wait–Spotify’s unspoken conclusion appears to be that because obtaining such knowledge is impossible, then Spotify have done nothing wrong.  Meaning everyone should be able to exploit all songs in any way they like without fear of any day of reckoning because it’s all just a mystery.  That’s certainly what Spotify did and what they now seek absolution for.  Plus–Spotify cites to the U.S. Copyright Office and the National Music Publishers Association to support this very argument.  (Which of course is in the category of what a great man once called “pure applesauce” or as a less great man said, pure unadulterated “Fancy” Grade Bullshit.)

So what makes bullshit “Fancy”?  Spotify’s lawyers actually do an excellent job of revealing the contours of the business risk that Spotify intentionally undertook when they launched the company in their biggest market.  Because the obvious conclusion one comes to in reading this parade of horribles and red herrings trotted out by the lawyers is that knowing all these risks, Spotify did it anyway.

And that’s the part where the lawyers don’t do such a great job.  They never once called Judge Beverly Reid O’Connell’s attention to Spotify’s public statements about accruing royalties for unlicensed songs.  Because it seems that the lawyers are actually arguing against their client’s public position–if Spotify can accrue royalties for songs they know are not licensed (setting aside the question of how they even know what rate to accrue royalties at for unlicensed songs), then how can it be that Spotify has no way of knowing which songs are unlicensed based on the lawyers’ parade of horribles?  According to Spotify:

When one of our listeners in the US streams a track for which the rightsholder is not immediately clear, we set aside the royalties we owe until we are able to confirm the identity of the rightsholder. When we confirm the rightsholder, we pay those royalties as soon as possible.

So at best these songs are “known unknowns”–Spotify knows that it doesn’t know who owns the song.  That precludes a direct license for the known unknown (otherwise the song would be a known known), and probably means that Spotify did not send in the unknown copyright owner NOI to the Copyright Office.  Of course, that also means that Spotify knows that it exploited the song without a license…which is kind of the point of this whole thing, right?

So which is it–Spotify knows which songs are not licensed and are accruing royalties at some theoretical rate (to the tune of millions of dollars according to press reports), or song ownership is such a mystery that such an accrual is not capable of mortal knowledge?

Don’t you think the Court might want to know about that accrual part?  And learn it from Spotify’s lawyers?  Or do you think that if they raised it the Court might be confused by that A and Not-A business?

Spotify has told us that they intend to pay every penny they owe and they have accrued royalties for songs for which they have no licenses.  That means they know which songs they have been using and for which they have accrued royalties.  Now that Spotify has been called out, rather than publishing a list of these songs, Spotify tries to hide behind the lack of some unicorn database to excuse their bad behavior.  A unicorn database that has never existed.  And certainly never existed when Spotify decided to enter the U.S. market.

Because if the situation really was as dire as Spotify would have you believe, then how could they ever believe that any license they ever get for anything is real, that it actually represents anything more than a flickering shadow on a cave wall?  So why pay anyone anything ever?

The Better to Stream You With, My Dear

And this is where the bullshit gets really fancy.  Because whatever the Copyright Office, NMPA or anyone else said about the desirability of the unicorn database, they never said that their general comments about the general state of things that would be nice to have supported the theory that Spotify could feast on the creative output of generations of songwriters without licenses or compensation in the absence of the unicorn.

These cases are of particular interest because they expose both Spotify’s hypocrisy and the potentially fatal flaw that streaming music boosters simply do not want to acknowledge–streaming services are in such a mad rush for IPO riches that they have little idea what music is or is not licensed.   Spotify’s hypocrisy because it has from the beginning tried to mask its craven greed in the mantle of saving the music business from piracy like the Big Bad Wolf in grandma drag.

When the Going Gets Tough, the Tough Get Fancy

To put this in perspective, estimates in the press are that Spotify has failed to license or pay royalties for at least 10% of the total number of songs that Spotify offers on its service, and some estimates are as high as 25%.

Before you blow that off as a small percentage realize the number of songs that Spotify is distributing–some 30 million songs with daily increases of tens of thousands.  So that means that Spotify has failed to license about three million songs at a minimum.

Three million songs.  This is copyright infringement on a massive scale, a scale so large that it sounds…well, what would you call it?  Certainly big enough that it overwhelms the ability of any one songwriter to effectively bring the law to bear.

This is the kind of scale that one would expect the government to get involved with.

At least you might expect the government to get involved if you thought that songwriters should expect at least as much protection from their government as do their cousins amongst the primates, amphibians and fowl, not to mention the land itself.  For it is undeniable that the brown pelican, the snail darter, the desert tortoise and even wetland marshes get greater protection from the U.S. government than songwriters.  Or as an afternoon hanging around committee rooms of the Texas Legislature will show you, hogs have more lobbyists than artists.

So if you’re asking yourself why David Lowery and Melissa Ferrick have to sue Spotify for massive failures to comply with the law instead of the government, there’s a simple explanation.

Songwriters are just the wrong species.  Ask BP what happens when you pull that kind of thing on a brown pelican.

So make no mistake–that’s why the songwriters have to take care of what should be the government’s problem.  And that’s some pretty fancy bullshit.

 

Copyright Royalty Board Webcasting Ruling

February 13, 2016 Comments off

 

There seemed to be no use in waiting by the little door, so she went back to the table, half hoping she might find another key on it, or at any rate a book of rules for shutting people up like telescopes: this time she found a little bottle on it (`which certainly was not here before,’ said Alice), and round the neck of the bottle was a paper label, with the words `DRINK ME’ beautifully printed on it in large letters.

From Chapter 1, “Down the Rabbit-Hole”, Alice’s Adventures in Wonderland by Lewis Carroll

Is Pandora Up for Sale or…What? #irespectmusic’s Blake Morgan on Whatever It Is

February 12, 2016 Comments off

The New York Times is reporting that Pandora is planning a sale of the company.  This is not surprising given the moves Pandora has been making which could either mean sale or bankruptcy reorganization, I guess.  Overpaying for Rdio and Ticketfly, for example, deflects attention away from how much Pandora’s management spends to run the company inefficiently.

We’ll have more about this, particularly the bankruptcy implications.  And remember our interview with Keith Bernstein of Crunch Digital who advised frequent audits to make sure you get your royalties out before the company goes out of business or is sold.

Blake Morgan had this to say on his Facebook page (from Germany where he is on tour–because that’s where the money is, don’t you know):

I was just about to post an update from my current tour in Germany, but this is simply too satisfying and important not to share first. Pandora broke its moral compact with the people who make their only product: music. Now, they’re facing the consequences. My own story as a music advocate began when an email exchange between myself and the founder of Pandora was made public in The Huffington Post in the summer of 2013. The day after that exchange was published, Pandora lost $130 million of value on the Stock Market in the first half-an-hour of trading alone. 30 months later, this is where their brand is at. Because of all of you––your energy, your defiance, your actions, your courage––they have had to learn a painful lesson: when you betray the people who make your company possible, those people won’t stay silent. And we didn’t. Onward, to victory. ‪#‎IRespectMusic‬

Remarks at the California Copyright Conference #irespectmusic Grassroots Advocacy Panel with Adam Dorn, Karoline Kramer Gould, David Lowery and Blake Morgan

February 10, 2016 Comments off
Ca5c9v2VIAE3V5f.jpg-large

Photo courtesy @amyraasch

What a great way to start Grammy Week!  Last night Adam Dorn, Karoline Kramer Gould, David Lowery and Blake Morgan came together to tell their personal stories and they let me moderate.  Each of them has an inspiring story of how they came to their personal epiphany, their inspiration to turn to advocacy as part of their lives.

And in case it wasn’t clear–we were recruiting!  Follow them on Twitter through the ‪#‎irespectmusic‬ and @theblakemorgan, @radioclevekkg @davidclowery @moceanworker and @musictechpolicy.

The following are my introductory remarks to the panel:

Successful advocacy sits on a three legged stool whether we like it or not—lobbyists, campaign contributions and individual action.  The music industry and the larger entertainment industry has largely failed to achieve successful advocacy.  We still have essentially the same problems today that we had 15 years ago and the industry is at least half its former size.  In case you haven’t noticed, the cavalry is not coming.

Why?  At the end of the day, until politicians think they may get unelected if they don’t listen, they’ll smile, take our money and our votes, and do nothing.

Blake KKG Conyers

There is one leg of the stool that we have some control over—individual action.  Any of us have the ability to take action and stand up rather than wait for some miracle from Washington.  That action can range from a Tweet to putting our jobs on the line—and since our jobs are on the line anyway, we may as well tweet about it.  And until we can deliver bodies at the polling place no one will fear getting unelected.

You’re going to have a lot of people asking for your vote in the next few months.  They’re not shy about asking you for money and your vote, so you need not be shy about asking how they are going to vote on your issues.  If that sounds aggressive, it is.  In the long run, we may get a fair and just revision of the Copyright Act, but as the economists say, in the long run we’re all dead.  The NAB has outlived generations of artists and songwriters and Google is learning from their example.

All of our speakers tonight have had this epiphany in one form or another and all of their stories are inspiring examples of individual action. Blake Morgan took on Pandora and Big Radio and founded the #irespectmusic campaign. Karoline Kramer Gould joined Blake in supporting the Fair Play, Fair Pay Act and became an inspiration to all of us. Adam Dorn started SONA out of spontaneous meetings with songwriters who were confounded by the state of the industry. And David Lowery started writing the Trichordist blog as a cathartic blog that has inspired thousands and is widely read.

doug collins

As far as the moderator is concerned, my own epiphany in starting the MusicTechPolicy blog 10 years ago was largely the same—why is the news all bad and why isn’t the market producing an outlet for truth.

The #irespectmusic campaign grew out of Blake Morgan’s personal advocacy and opposition to Pandora’s Internet Radio Fairness Act. His viral posts on the Huffington Post about IRFA and what he perceived as Pandora’s deceptive PR tactics trying to enlist artist support against their own interest led directly to his advocacy in support of a performance royalty for terrestrial radio.

After IRFA failed to pass, Blake started an online petition to support a terrestrial radio royalty—and issue campaign as opposed to a particular piece of legislation. The petition has had over 13,000 signatures so far from music makers and music lovers. That made it easy to attach the #irespectmusic hashtag to the Fair Play, Fair Pay act when it was introduced by Blake’s Congressman, Jerry Nadler.

nadler

While the #irespectmusic campaign started with artist pay for radio play, it soon evolved into a campaign for fair treatment for all creators. This lead in turn to his recent lobbying trip to the Senate supporting the Songwriter Equity Act and an alliance with the NMPA.

Adam, Blake, David and Karoline all have inspired each other to continue in their individual advocacy and we hope can inspire you, too.

image

 

TONIGHT! California Copyright Conference Panel on #irespectmusic

February 8, 2016 Comments off

The California Copyright Conference will be hosting a panel entitled “The I Respect Music Campaign and the New Grassroots Artist Rights Advocacy” on February 9 from 6-9:30ish at the Sportsman’s Lodge in Los Angeles.  We will be having a wonderful group of panelists in Adam Dorn pka Mocean Worker, Karoline Kramer-Gould, David Lowery and Blake Morgan.

CCC Members and College Students $45 per person | Non-members $55 per person
Students must show College ID at the door, if paying at the member rate

Click here for details and reservations!

The I Respect Music Campaign and the New Grassroots Artist Rights Advocacy

Blake Morgan founded the #irespectmusic campaign to support fair treatment for creators, starting with over 13,000 signers of a petition calling on Congress to support artist pay for radio play.   After Reps. Jerry Nadler and Marsha Blackburn introduced the Fair Play, Fair Pay Act, #irespectmusic supporter and radio programmer Karoline Kramer-Gould co-signed a letter to Chairman Bob Goodlatte supporting Fair Play, Fair Pay, the only radio worker to take a public position contrary to the National Association of Broadcasters.

#irespectmusic has also embraced support for the Songwriter Equity Act through a partnership with the National Music Publishers Association. David Israelite, NMPA’s CEO, referred to #irespectmusic as the largest spontaneous grassroots movement in American music history.

The panel will discuss the importance of artist rights advocacy at the grassroots level, citizen engagement and lessons learned from the #irespectmusic campaign.

Tuesday, February 9, 2016
6:15 PM Check-In ● 6:30 PM Cocktails ● 7:00 PM Dinner

SPORTSMEN’S LODGE EVENTS CENTER
12833 Ventura Blvd, Studio City, CA 91604 (Coldwater Canyon & Ventura Blvd)

Moderator:

Chris Castle, Founder, Christian L. Castle, Attorneys, Austin.  Editor of MusicTechPolicy and contributor to Huffington Post.

Panelists:

Adam Dorn, aka Mocean Worker is a recording artist, film/tv composer and music publisher. He’s a member of the SONA Board (Songwriters Of North America) who’s very passionate about songwriters rights

Karoline Kramer-Gould, radio programmer & music lover, Cleveland OH

David Lowery, co-founder of Cracker and Camper Van Beethoven, writer of The Trichordist and lecturer at Terry School of Business, University of Georgia, Athens, GA

Blake Morgan, singer-songwriter, producer and owner, ECR Music Group, New York, NY

…and special guests!

%d bloggers like this: