CMU, the Black Box, Enron and the MMA

One thing you can say about Big Tech apologists Complete Music Update is they are consistent.  Yes, the Pravda of music tech can always be counted on to come up with the lamest excuses for the excesses of the 1% of the 1%.  The latest example is CMU’s coverage of the black box distribution to the MLC.  

Rather than asking the obvious question of how are songwriters better off with getting paid with their own money with no penalty in exchange for a release from liability for the largest companies in commercial history, CMU brings out the go to pitch:  It’s actually the label’s fault.  One thing you learn from working at a record company is that whatever it is, it is always your fault, and in fairness, sometimes it is.  Not this time.

Here’s the pitch:

[T]he actual mechanical royalty, services used to have to identify the writer or publisher that controlled any one song, send that person some paperwork, and then make payment. Failure to do so meant the service had infringed copyright.

It was a far from perfect system because streaming services don’t actually know what songs are contained in the recordings they receive from record labels and music distributors, as the labels and distributors don’t tell them. This means the services had to figure out what song was in each of the millions of tracks on their platforms, and then figure out who owned each song copyright. There is a copyright registry in the US, but that only helps to a point.

So right there, CMU ignores the 100 million or so “address unknown” NOIs that the services sent to the U.S. Copyright Office that gave them a royalty free license including for artists like Ed Sheeran.

Perfect Ed Sheeran SX Lookup

The idea that the biggest technology companies in commercial history, at least one of which makes billions off of search, couldn’t find songwriters is absolute bunk. You can’t find what you don’t look for.

MLC Payments

Plus the services have an independent duty under the copyright law to license songs. Not the labels, the services. That was always the deal and always had been the deal. That means if you can’t license the song, don’t use the song. And rest assured, the fastest way to get the market to produce the information necessary to send the song license–which was compulsory, by the way, the writers can’t say no–is to refuse to post the recording until you get it. Every product manager at every label would get that message, and they’d get that information for the service, even if it was back channel.

Double plus, if the services bothered to check the PRO databases, they would almost always find the publisher information.

Even so, the unmatched payment was $424 million and change, concentrated at Amazon, Apple and Spotify which together account for approximately 80% of the total. Two trillion dollar market cap companies who were little lost lambs in the woods. But hear this–the black box didn’t get to be hundreds of millions by itself nor did it get to that amount in a single day.

Somebody–a human decision maker–decided it was OK to let that reserve account for unmatched get over $100 million. And they kept making that decision for years in collusion with their public accounting firms.

Did they throw up even a rudimentary claiming portal until they were forced to do so by a court in the Lowery/Ferrick class action? Nope. They purposely hid the information from songwriters who were left guessing whether they were owed anything. And frankly, if it weren’t for David Lowery’s class action, they’d still be wondering because none of this would have happened.

So when CMU publishes these apologias for the ultra rich and COVID profiteers, they are apologizing for what may well turn out to be massive fraud. Fraud on an Enron level. And fraud is not covered by the MMA black box giveaway.