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Archive for May, 2018

@TerrenceHart: Does the ACCESS to Recordings Act violate the Constitution’s Takings Clause? — Artist Rights Watch

May 31, 2018 Comments off

“I do believe that the intellectual property that you create is just that.  It’s property and you ought to be protected in the property that you create and that we all enjoy.”

Senator John Cornyn, U.S. Senate Committee on the Judiciary, May 15, 2018.

Unlike the CLASSICS Act and the approach recommended by the Copyright Office, the ACCESS to Recordings Act falls far short of Constitutional requirements and would likely open the federal government up to liability for takings claims.

via @TerrenceHart: Does the ACCESS to Recordings Act violate the Constitution’s Takings Clause? — Artist Rights Watch

Is Michael Beckerman Wearing Your Safe Harbor?

May 29, 2018 1 comment

As MTP readers will recall, I prefer to think of Big Tech’s various safe harbors like the CDA, DMCA and now the MMA as an income transfer.  It’s not that the money isn’t getting made, it’s just not getting made by the people who created the value.

For example, when Google profits from selling ads against infringing videos, that money doesn’t disappear, it just doesn’t go to the artist.  So where does it go?

Well…according to a recent article in Modern Luxury “Men of Style,” it appears to go into Michael Beckerman’s shoes.  Michael Beckerman is the CEO of the Internet Association, Google’s main lobbying shillery in DC and long time revolving door man.  (Picture below with floral decoration courtesy of Wednesday Addams.)

Michael Beckerman

That’s right–$4,950 shoes.  But no socks.  (Or 6,689,189 YouTube streams.)  Now that’s what I call an income transfer.  Looks like DMCA safe harbor on his feet, CDA for his watch–what will he buy himself as a reward for the MMA reachback?  Maybe a little poker in Vegas with his buddies?

 

 

Goliath Never Learns: Watch Out for Music Choice Duping Artists for Music Modernization Act in Senate

May 27, 2018 Comments off

Remember when Blake Morgan called out Tim Westergren for sending emails to artists trying to get them to write their Member of Congress to support the Internet Radio Fairness Act (IRFA) and lower royalties for Pandora?  “Million-a-month” Tim really stepped in it that time because he didn’t expect the artists to figure out he was both pushing a deceptive deal on them and treating them like they were idiots. And that started the #irespectmusic campaign.

patrick stewart

So now there’s yet another email campaign targeting artists to act against their own interest.  This time it’s about preserving a subsidy for Music Choice’s cable music service.  If you still have cable, you’ll probably find Music Choice in the highest numbered channels.

Here’s how the subsidy works–which you should know because it’s paid with your money.  Music Choice (like Pandora) gets to take advantage of the statutory license created by the Congress in 1998 for the use of your recordings in “noninteractive” digital services.  This statutory license is a huge benefit for everyone who uses it as they can avoid individual negotiations, get streamlined royalty accounting to SoundExchange and never have to pay–clutching pearls–artist advances.

Because the license is statutory, the government also has to set the royalty rate you get through a process now conducted by the Copyright Royalty Judges.  The CRJs are supposed to set a market rate based on economic analysis and the services using the statutory license pay those rates.

But–some services are more equal than others.  Back in 1998, the Congress was trying to encourage investment in a new market for digital music services and so certain named services were given special treatment by the government to protect them from what’s called the “willing buyer/willing seller” standard that more closely tracks market rates.  This special treatment was to give certain services that were already up and running in 1998 a break on royalty rates–your royalty rates–through what is effectively a government subsidy that you finance.  This was because these “preexisting services” had started their businesses in reliance on the subsidized rates–and guess what, they kind of got to liking that subsidy.

Three of those preexisting services still exist today:  SiriusXM, Musak and Music Choice.  All three of these companies have enjoyed the break you gave them on your royalty rates for 20 years.  However–the reason to give them that break has long passed.

MTP readers will remember this issue came up with IRFA in 2012.  As we noted then, SiriusXM’s then-CEO Mel Karmazin told CNBC’s Jim Cramer in an interview about the merger of Sirius and XM Radio, both of which got the same subsidy as Music Choice:

Free cash flow is what enables you to buy back your stock, make acquisitions, pay down debt. And I believe free cash flow is an important metric. Our free cash flow now, is growing– it’s extraordinary. Before the merger we had negative free cash flow of $500 million. Negative free cash flow. This year we will have $700 million of free cash flow. We haven’t given guidance for next year. Analysts have us at a billion of free cash flow and continuing to grow. So it’s a great start.

The Music Modernization Act would switch these three subsidized services onto the same royalty rate as the thousands of other services that somehow seem to get by with the unsubsidized “willing buyer/willing seller” rates.  And Music Choice is leading the charge to keep that subsidy that you’re giving them, Musak and SiriusXM.  Presumably this is because Music Choice is more sympathetic than the cash-rich goliath SiriusXM.

To the point—Music Choice is evidently sending out an email to some artists (possibly through intermediaries like distributors) to lobby the Senate Judiciary Committee to preserve the Music Choice subsidy.  Why?  The Music Choice letter they want you to sign tells you:

Many of us have had our careers explode because of the exposure we got first on Music Choice which is critically important to the artist community.

Really.  That’s news to me.

And then there’s this:

Being played on just one Music Choice channel is like being played on every radio station in the country serving a particular music format.

No it’s actually nothing like that.

And here’s my personal favorite:

None of the streaming services provide anywhere near the level of promotion and support that we have received from Music Choice.

Exposure bucks, baby.  It’s so 1999–back to the future with Music Choice.  Where’s that flux capacitor when you need it?

Exposure Bucks

Preserving Music Choice’s subsidy would be a material change in the bill that might be enough to derail the coalition that backed it in the House and that was clearly influential on the Senate Judiciary Committee in the recent hearing.  Remember–the Senate version of the Music Modernization Act has to pass the Senate before it becomes law.  It also has to pass in essentially the same form as the House version which already passed the House unanimously.  Continuing the subsidy to these three services is a material change to the bill that could cause the whole bill to fail.  

Which, of course, would be just fine with Music Choice, SiriusXM and Musak because that would also preserve their subsidy.

So heads up–they’re running the old IRFA play all over again.  Don’t get duped.

But don’t let that stop you from supporting the Kickstarter campaign to buy a DeLorean DMC-12 for Music Choice so they can get back to the future in the style to which they have become accustomed.

 

Spotify Final Class Settlement

May 22, 2018 1 comment

The court approved Spotify class action settlement is here, more to come.

 

Lessig & Co Miss the Point that Bait and Switch on MMA Will Burn Down the Cornfield

May 21, 2018 Comments off

In case you’ve missed it, Lester Lawrence Lessig III is reprising his role as Copyright’s Biggest Loser with an op-ed in Wired about the mythical interpretation of the copyright term in the CLASSICS Act that has been taken apart by David Lowery and Neil Turkewitz.  Corey Doctorow (that well known pre-#metoo x-ray poster of minor redaction fame) also got it completely backwards as illustrated in David Newhoff’s excellent post.

It is the motivation that is most interesting about Lessig’s preening, the 40 members of the professoriate (that includes a liberal sprinkling of Google Academics) following each other right off the bandwagon and Doctorow’s whinging.   They all seem to believe that somehow there will still be a “Music Modernization Act” if the pre-72 fix in CLASSICS is stripped out.  Doctorow blames Senator Hatch, Lessig blames the usual suspects (the phantom Mickey Mouse, of course), and the IP professors are just proving that lawyers can’t do math–yet again.

For example, Doctorow tells us:

Back in March, the House passed the Music Modernization Act, a welcome bill made it easier for musicians to get paid reliably for digital streaming.

So that is quite a sentence–the bill actually passed the House “back” in April, April 25, 2018 to be precise.  So that’s wrong.  I gather that since he’s objecting to the only part of the bill (the former CLASSICS Act) that addresses “musicians”, he meant to say “songwriters.”  So that’s wrong, too.  And of course, the bill does a whole lot more that one would think would warm Doctorow’s heart (and hips, presumably), like get rid of statutory damages and attorneys fees to stop litigants like David Lowery, Melissa Ferrick, Bob Gaudio and Bluewater Music.

Both Lessig and Doctorow seem to make the assumption that CLASSICS can be stripped out of both the Senate version and the House version of the bill.  (It seems to have escaped Doctorow that Senator Hatch actually introduced the House version in the Senate and that the bill he likes that passed the House includes the pre-72 fix in CLASSICS.)  And without getting into who is right or wrong in their interpretation of the effect on the copyright term of pre-72 sound recordings, there is one thing that is the clear motivation for all this effort by the professoriate and the Google spin machine.

They intend to pass the safe harbors in the Music Modernization Act and get rid of the pre-72 loophole fix.  And they think the we will all go along with that.

They are, as usual, NUTS.

Stark raving mad.  The kind of people who see Mickey Mouse under the bed and post pictures of their pelvis dedicated to a woman they are in a flame war with.  (Move over Harvey Weinstein.)

Let me say it clearly–if they try to do this, if Google sends its shills up to Capitol Hill in hopes of a bait and switch in the Senate, the entire package will fail and it will be class action city.  But stripping out the pre-72 fix for the bait and switch is clearly what they are up to.

While you think about that, have a listen to a pre-72 recording of my friend John Baldry singing the Randy Newman classic “Let’s Burn Down the Cornfield” produced by Elton John.

We can listen to it burn…

 

 

 

Now this is a cover MOFOs

May 21, 2018 Comments off

@MusicFirst: Congress, end a longstanding injustice for legacy music creators #irespectmusic — Artist Rights Watch

May 18, 2018 Comments off

Otis Redding sat on the dock of the bay in 1967. Roy Orbison sang for the lonely in 1960. Miles Davis was kind of blue in 1959. These artists’ iconic recordings live on today and are frequently played across streaming services, satellite radio, and FM radio. Tell Congress to make Big Tech pay its fair share.

via @MusicFirst: Congress, end a longstanding injustice for legacy music creators #irespectmusic — Artist Rights Watch

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