Remember when the Librarian of Congress issued a press release about how Maria Pallante was being promoted from the Register of Copyrights to something that sounded awfully functionary–and not a promotion. I don’t know how the Librarian runs things, but it’s not exactly industry standard to lock someone out of their email account when you’re promoting them.
Notwithstanding the Librarian’s press release on Friday, we now know that Pallante turned down the “promotion” and has now resigned.
Thanks to the vigilant journalist Robert Levine, we now have access to the memorandum from the Librarian of Congress to Maria Pallante that prompted her resignation. And it sure looks like what’s called a “constructive termination” to me.
The essence of constructive termination is that it is essentially the same as firing the person, except you don’t. You just move them out of their current responsibilities, give them tasks for which they are unsuited or that would radically underutilize their talents, move them to different surroundings or offices, take away their staff, and severely limit their contact with others, especially persons senior to the person doing the constructive termination.
The idea is that while you haven’t actually terminated them, you’ve “made their lives miserable” and created a hostile work environment that any reasonable person would resign from.
This is usually done in retaliation for something the employee has done that angered their boss–you know, like writing a memo for Members of Congress against full work licensing or opposing the FCC’s position on set top boxes.
The in house lawyers usually manage to head off this kind of thing at the pass, but occasionally an inexperienced executive loses their mind and walks right into a constructive termination situation because they are too bull headed to listen to their lawyers. Those cases are costly and usually nasty.
So here’s the relevant parts of that memo from the Librarian of Congress to Pallante:
Effective today, I am reassigning you to the position of Senior Advisor to the Librarian [meaningless title–check]. I need your expertise on the application of copyright law as I plan for the Library to expand its service to the American people by making the national collection as widely accessible as possible and ensuring that it includes digital works as well as traditional materials. I want to be sure that we execute these plans in full consideration of both the special provisions that copyright law makes for the Library of Congress and our responsibilities to copyright owners. Your expertise will be very helpful in accomplishing these goals. [That last is the kind of thing you put in one of these memos when you know the opposite is true. If her expertise was so gosh darned helpful, then why is she being moved?]
According to analysis from the HathiTrust [a repository of digitized works from Google Books and the Internet Archive that was sued by the Authors Guild], as many as 50% of the books published in the U.S. between 1923 and 1963 may be in the public domain. To maximize our ability to make the national collection available online, the Library needs a well-defined, efficient procedure for determining the rights status of books first published between 1923-1968.
Please complete an analysis of the various strategies taken by other organizations in determining the copyright status of published U.S. books. Develop a legally sufficient and efficient procedure that Library reference staff could follow to clear books from this period for digitization and online distribution. Document the approach in an easily understood and visually engaging manner that issuitable for publishing on the Web….
I would like you to undertake a comprehensive study that identifies new and sustainable retail opportunities for the Library and examines best practices of retail operations in a variety of cultural institutions….[selling t-shirts?]
Please consult with David Mao about deadlines [enter the short leash]. Each week, please provide David and me with a report on the activities you’ve undertaken on these assignments. [Sounds like David Mao is her direct report, right? I thought this gig reported to the Librarian] If you need research assistance, contact David or me before tasking anyone. I do not anticipate that this assignment will require any communications with Members of Congress or congressional staff. I am arranging suitable office space for you and will arrange for you to complete the move from you’re your [sic] current office to the new space by Oct. 31, 2016.
And there you have it. Pretty good case for retaliation constructive termination, although we expected better from a senior government official.
You’re not in Kansas anymore.
Two vastly wealthy multinational media companies are exploiting a copyright law loophole to sell the world’s music without paying royalties to the world’s songwriters on millions–millions–of songs. Why? Because Google and Amazon–purveyors of Big Data–claim they “can’t” find contact information for song owners in a Google search. So these two companies are exploiting songs without paying royalties by filing millions of notices with the Copyright Office at a huge cost in filing fees that only megacorporations can afford–an unprecedented land grab in nature, size and scope.
That’s right–Google and Amazon are falling over themselves to use their market power to stiff songwriters yet again. And as I will show, it is not just obscure songs that are affected. New releases, including one example from Sting, are also targets suggesting significant revenue loss to songwriters. (I go into this in more detail on this series of posts.)
I happened to speak to a representative of one of the mass NOI filing companies after a recent panel in Los Angeles who assured me that the reason that his clients were filing these NOIs was not because they did not want to pay royalties but because they were so worried about liability from a “Jeff Price jihad” and that his clients fully intended to pay royalties retroactively once the song owner became known unlike the record companies who are “thieves”. I believe that he believes that his client believes that they’re just trying to avoid being sued for not having the rights, but humor this unbeliever. My bet would be that getting that retroactive payment will take the effort worthy of an act of Congress.
If his new boss clients had a reputation for or history of treating creators fairly, I’d be far more inclined to bet on sunshine and puppy dog tails, but they don’t so I won’t. The problem would be easy to solve–all they would need to do is issue a press release or even a blog post on the Google Public Policy blog stating that it is the official position of the company to pay retroactively. Even if you accept his premise that record companies and music publishers are “thieves,” they never filed millions of NOIs. In the meantime while we’re waiting for that post, I think we have to act as if it is not coming.
The U.S. Compulsory License
Songwriters are the most regulated workers in America. The government sets wage and price controls on most uses of songs and practically everything else about a songwriter’s business–except fulfilling government’s basic role of keeping them safe from piracy and multinational monopolists gaming the system. Congress needs to stop this latest scam.
The latest loophole that Google and Amazon are hacking is uniquely American–the compulsory license for songs. No other country has one. Most songwriters would prefer that the U.S. repeal this legacy anachronism from 1909 that keeps the government’s boot on their throats.
In order to get the government’s license, services only need notify the songwriter (or their publisher) that the service intends to use the song under the compulsory license. Of course, sending this notice of their intention to use the song (called an “NOI”) requires knowing who to send it to, and that is the “hack” that Google and Amazon are exploiting now. Others services surely will follow their market leadership if Congress fails to act.
The hack uses market power to manipulate a loophole in how those NOIs are sent. Common sense tells you that to send a notice, you must know who to send it to, even for a song. But does common sense also tell you that if you don’t know, the law should allow you to exploit the songs without compensation? Particularly if you’re the biggest purveyor of data in human history?
The legacy compulsory license allows services to exploit songs if they decide they can’t find the songwriter–and not pay royalties until the songwriter finds them.
That’s right–Google and Amazon trade on a loophole that allows them to serve NOIs on the U.S. Copyright Office if the song owner cannot be found in the public records of the Copyright Office regardless of what other information is readily available to these services, including their own. And once Google or Amazon serve that “address unknown” NOI, they don’t have to pay royalties and they cannot be sued for copyright infringement–so the millions in filing fees they will spend at the Copyright Office is a kind of insurance premium. This excerpt from the Copyright Act states the rule:
Why Can’t Google Search?
The “address unknown” NOI starts from this premise: Google is supposed to search for the song owner’s contact to send NOIs.
That’s right–Google is supposed to search. Think about that. This 1976 rule was never intended to apply to a music user with Google’s search monopoly. Yet, if Google “can’t” find the song owner after a search, then Google can serve an “address unknown” NOI to the Copyright Office and then exploit the song for free until the songwriter can be “identified” in the Copyright Office records–which may be never.
That registration by songwriters–while prudent–is costly and entirely voluntary. Forcing songwriters to register essentially turns the system into a version of YouTube’s “opt out” debacle, and probably violates international copyright treaties.
But the idea that Google can’t find someone is a remarkable thought. Gmail alone has over one billion users. Google knows everything about everyone and makes billions of dollars from reselling and manipulating that information. Not to mention the fact that Google bought the music licensing service Rightsflow–itself an NOI mill. Not to mention ten years of information Google has scraped from Content ID on YouTube or sheet music on Google Books.
Amazon also has a phenomenal amount of information about music ownership. As one of the biggest CD and DVD retailers, Amazon certainly has a head start in song research.
However–it appears that Google and Amazon are not using their own data for NOIs. Instead, they apparently are buying databases from the Library of Congress that tell them whether a song is registered for copyright or otherwise recorded in the digitized Copyright Office files (which songwriters are not obligated to do in order to get the benefits of the compulsory license). Those Library of Congress databases at best only cover copyrights after 1978 for technical reasons, so tens of thousands of jazz, blues and classical compositions created before 1978 are not included, as well as songs from outside the US before or after 1978.
Why buy this data when these giant corporations already have so much information at their fingertips? Because the point for the services is not to find out who actually owns the songs, the point is to find out if the Copyright Office has a record of who owns the songs based on the Library of Congress data.
That is the hack.
Kafka-esque Moral Hazard
In other words–the government allows Google to claim they can’t find the songwriter even if Google’s own data would reveal their identity just because the song owner isn’t included in the Library of Congress database at the time Google searches. And there’s the “gotcha”.
Kafka’s next book is in there somewhere.
Offering all the world’s music all at once presents a licensing problem that no system will be able to solve due to the sheer numerosity and disaggregation of the creative process. How many songs will be written by the time you finish reading this post and how would you find out who wrote them?
So it should not be surprising that the market has offered a few ways to solve for this problem: Direct licenses (bypassing the NOI altogether) and NOI clearance companies that specialize in maintaining song owner information to send out mass mailings of NOIs (sometimes called “carpet bombing NOIs”).
These are two significant methods available to Google and Amazon and my guess is that these monoliths employ both methods for their interactive streaming services (the kind of service that competes with Apple and Spotify).
What’s the Alternative?
If Google and Amazon cannot find the song owner under their direct licenses or through an NOI company, how can they find the song owner? The easy answer is don’t use the song. But that approach is counter to offering all the world’s music at scale by creating supply that is not responsive to demand.
Deciding which songs are right for “address unknown” NOIs requires some Silicon Valley style hocus pocus. Remember–it’s not that Google can’t find the song owner. The loophole requires that they can’t find the copyright owner in the pubic records of the Copyright Office, even if Google has actual knowledge of their whereabouts.
Then you have to believe that Google knows where to get the information for which direct licenses they want, they know how to carpet bomb NOIs, they have a decade of information in Content ID, but when it comes to some songs, Google has to turn to the Library of Congress? And Google’s only choice is to serve “address unknown” NOIs on the Copyright Office?
Once served, the Copyright Office posts these mass filings on their website in large Excel files so that songwriters can sift through the haystack to find their needles. This hit and miss and self-serving process is fraught with moral hazard and should not be the law in 2016.
This is what the filing looks like–but realize that “1 NOI” means “1 NOI With An Excel file with over 40,000 songs on it”.
Sting Songs Give Some Examples
A spot check of a couple of Google’s filings reveals that Google is not getting it right. Let’s use three Sting songs for an example.
Sting’s recent release “50,000” (coincidentally a tribute to David Bowie and Prince) is on Google’s “address unknown” NOI list. That song is probably subject to a direct license, but the song copyright registration may not yet have been processed. There’s almost always a delay in processing copyright registrations, so new releases will rarely appear in the Library of Congress database day and date with the song’s release. Google will not be paying royalties on Sting’s song, but will be exploiting it.
That’s right–a song that is a tribute to an artist rights advocate like Prince is itself being ripped off.
Google has also filed an “address unknown” NOI for a song entitled “Fragile (Live)”. My bet is that “Fragile (Live)” is “Fragile”, the well known hit song and anthem of the environmental movement.
This likely means that someone at Google seems to think–or wants to think–that “Fragile (Live)” is a different song than “Fragile”, probably because there is a sound recording registered for “Fragile (Live)” in the sound recording metadata but no song registered by that name in the Library of Congress database. And why would there be if it is the same song? We humans have a way to catch this kind of mistake.
It’s called listening.
This pattern repeats with “Brand New Day (Cornelius Mix)”, also included on Google’s “address unknown” NOI. Again, a version of the sound recording, not the song. The song remains the same.
It is highly likely that the songs “Fragile” and “Brand New Day” were registered with the Copyright Office long ago. That’s probably why the “Live” and remixed versions of the sound recordings show up in Google’s NOI filing for the songs and the original versions do not.
In this case, not only are these songs likely covered under a direct license with Sting’s publisher, but even if they are not, the song owner’s information is identified in the public records of the Copyright Office. The loophole does not apply, but Google takes it anyway and the cost of checking up on a multinational media company falls on the songwriter.
And given that it’s Google, the songwriter will probably have to sue them to a final non-appealable judgment in order to fix the mistake that should never have been allowed to happen in the first place.
The Congress Must Act
The government’s compulsory license has become distorted by rent-seeking behavior by multinational media corporations. It should be stopped or substantially modified. If Google is allowed to use this loophole to profit at the expense of songwriters from its considerable influence peddling and litigiousness, that will be crony capitalism writ large.
Despite the assurances of the mass NOI filing agent, my view is that until I see it in writing, I have to assume that Google and Amazon took this route because it not only offered an opportunity to react to Jeff Price or David Lowery who have the temerity to speak up on behalf of song owners, it had the added bonus of actually stiffing songwriters. The reason I think that is so is because that’s what they chose to do rather than taking the obvious alternative–just not using someone’s property if you decide you can’t find the owner.
I’m looking forward to participating on a great panel on fixing our future in the music business, moderated by the brilliant Dr. Gigi Johnson, founder and executive director of the UCLA Center for Music Innovation.
Music 2020: Recreating Music’s Future will be a lunch time panel held on October 13 in Los Angeles under the auspices of the Association of Independent Music Publishers an important voice for independent publishers in our policy efforts. I’m part of an august group: Sam Kling, SVP Creative Operations, SESAC & AIMP Board Member and Vickie Nauman, Founder & Owner, CrossBorderWorks, both of whom I know to be deep thinkers on problem solving in our business.
The event is to be held at Lawry’s, 100 North La Cienega Blvd. (near Wilshire) in Beverly Hills from 11:30 am to 1:45 pm on October 13. Reservations are required and lunch is served. Tickets are $44 for AIMP members and $57 for non-members.
Click here to get to the AIMP website to sign up!
…there was lunch in the larger, first floor cafeteria where, in the corner, on a small stage there was a man, playing a guitar, who looked like an aging singer-songwriter Mae’s parents listened to.
“It is,” Annie said, not breaking her stride. “There’s someone every day. Musicians, comedians, writers….We book them a year ahead. We have to fight them off.”
The singer-songwriter was signing passionately…but the vast majority of the cafeteria was paying little to no attention.
“I can’t imagine the budget for that, ” Mae said.
“Oh god, we don’t pay them.”
The Circle, by Dave Eggers
Lyor Cohen is going to run YouTube Music. My prediction is that in a year, he will not have been able to accomplish much of anything. This is not because of Lyor who is one of the best we’ve had in the music business. It’s because of the way Google operates and who is really in control.
First, remember that YouTube has made a point of telling us how unimportant music is to their business. I’m so sure that was part of their pitch to Lyor–you’re not going to be doing anything that’s very important to us or contributes much to our bottom line. So forget that fifth assistant and any revenue based bonus. Because, you know…you’re just not that big a deal to us.
Oh, to have been a fly on the wall…
But seriously, like any large organization, Google has competing bureaucracies and therefore its wholly-owned subsidiary YouTube does as well. (Google is now the largest media company in the world.) YouTube’s organizational independence is additionally blurred because it is the #2 producer of revenue inside Google relative to search and advertising sales. But not the music part, let’s get that straight now.
There seems to be a three-legged stool of competing interests in dealing with YouTube which we can describe with generalized labels–the “engineers”, the “policy people” (essentially Fred Von Lohmann) who are mostly lobbyists and lawyers, and the “business people” starting with Robert Kyncl and now with Lyor. It’s unclear who has the upper hand in this triumvirate, but it’s pretty clear that the business people do not control their destiny.
That leaves jump ball for control of YouTube’s deals between the engineers and the policy people who seem to compete with coming up with the solution that is the worst for anyone with a passing acquaintance with private property rights in general, and artist rights in particular. My hunch is that this will drive Lyor nuts in short order.
YouTube’s ineffective negotiating power with Big Google is particularly confusing because YouTube is both a search engine and an advertising publisher. (Let’s call the larger Google “Big Google”.)
We sometimes forget that YouTube is the largest video search engine in the world–but don’t let that go to your head because we all know how unimportant music is to YouTube.
What’s obvious is that the engineers and policy people do not understand a fundamental point about dealing with the creative community. They are every bit as much of ambassadors to the creative community–the entire creative community, not just the YouTubers who essentially are entirely dependent on YouTube for their success.
Why it is that YouTube has such little clout internally is anyone’s guess. My bet is that if YouTube didn’t have to check with a host of bureaucrats at Big Google, it would be much, much easier to do business with YouTube. However, if past is prologue, I seriously doubt that Fred Von Lohmann is going to take any guff from Lyor. Although I would buy tickets to watch.
To state the obvious, unlike the YouTube lottery winners, professional artists who are not dependent on YouTube are not dependent on YouTube. If pushed, there very well may come a day that they move on. En masse. Given YouTube’s recent change in monetizing only “advertising friendly” content and asking for a cut of brand integrations–Google’s version of 360 deals–even the “YouTube stars” may also move on–and how Lyor will relate to these folks is anyone’s guess. I think he could do pretty well with managing that artist relations problem, if the YT Stars will let him. Whether that happens remains to be seen.
But the mass artist exit may happen sooner than you might think, despite YouTube’s monopoly on video search. YouTube is currently taking a beating from artists and songwriters. Note that the beating is administered to YouTube–not to the engineers and the policy people at Big Google. Or not yet, anyway. Most professional creators don’t know these bureaucrats exist. Those bureaucrats at Big Google are largely faceless (with the exception of Fred Von Lohmann) and take no heat when YouTube gets roasted alive by key opinion makers in the music business (such as Irving Azoff). Lyor will have something of a honeymoon period, but regardless he can’t make the “value gap” disappear.
So how could Lyor repair the problems with YouTube? I think that it’s going to be a heavy lift, but it would start with Big Google telling their engineers and policy types to back off. Then we’d at least have an idea of whether YouTube can ever be a good partner. I suspect we could have at least much better relations with an independent YouTube. Whether Lyor agrees with that or could make it happen if he does remains to be seen.
Google hasn’t experienced an angry artist taking a baseball bat to their royalty department yet despite the $0.49 royalty checks. Someone with Lyor’s experience could definitely help out with that if it ever happens.
YouTube should try to shake off the control of their internal masters at Google. Then at least we’d know who we are dealing with. Right now it looks like Lyor is going to get a lot of blame simply because he has the name ID.
Big Tech’s Latest Artist Relations Debacle: Mass Filings of NOIs to Avoid Paying Statutory Royalties (Part 1) — Music Tech Solutions
Google, Amazon and MRI are reportedly filing “millions” of NOIs with the Copyright Office after buying data out the back door of the Library of Congress–all to avoid paying statutory royalties. This takes “carpet bombing NOIs” to a whole new level of hurt for songwriters, and forces the Copyright Office to be complicit in the wholesale rip off.
T-Bone Burnett’s keynote at Americana Fest Nashville TN Thursday Sept 22nd. Reprinted with permission of the author. Technology is turning over every ten years. Their technologies don’t and won’t last. Our art-if we do it right- will. I have come here today first to bring you love. I have come here to express my deep […]
Someone must have been telling lies about Josef K., he knew he had done nothing wrong but, one morning, he was arrested….”And why am I under arrest?” he then asked. “That’s something we’re not allowed to tell you. Go into your room and wait there. Proceedings are underway and you’ll learn about everything all in good time….”
From The Trial, by Franz Kafka.
Right on cue, one Google Shill after another is floating the idea that the U.S. Department of Justice should appeal their latest oopsie to the Second Circuit. Talk about ungrateful–Judge Stanton, the BMI Rate Court judge was also the judge in Viacom v. YouTube and the accompanying artist-oriented class action against Google. In the YouTube case, Judge Stanton ruled for YouTube. Back then he was hailed by Google Shills everywhere as a great jurist, the peoples’ judge and hero of the disruptive class, because he poked a finger in the eye of bourgeois artists.
Talk about your sore losers–Judge Stanton went from #hero to #goat in record time as CCIA’s Matt Schruers told Bloomberg:
Matthew Schruers, vice president of law and policy at the Computer and Communications Industry Association [CCIA], which represents technology companies like Pandora and Google, said he expects the department to appeal the decision.
“Today’s decision will increase uncertainty for music licensees and threatens to complicate an already opaque licensing landscape,” he said in an e-mail.
The CCIA is an OS–Original Shill, which is of course what they get paid to be.
As is Public Knowledge, who we heard from next:
Here’s a press release from the Chief Gloater at Google Shill Lister Public Knowledge, which can be summed up in the well-known edict from Miniature, IGNORANCE IS STRENGTH:
The following be attributed to Raza Panjwani, Policy Counsel at Public Knowledge:
“We are deeply disappointed by Judge Stanton’s summary dismissal of the Department of Justice’s carefully-considered interpretation of the BMI consent decree. The plain language of the consent decree, BMI’s statements to the DOJ, BMI’s marketing language about its licenses, and appellate precedent all support the DOJ’s interpretation. Fractional licensing threatens to deprive the public of access to music by undermining a licensing marketplace that generates over a billion dollars in revenue annually for BMI alone, and which hundreds of thousands of business and outlets rely on to use and play music. This decision introduces uncertainty for users, opens the door to anticompetitive behavior, and should be appealed and reversed.”
Good thing they never asked a songwriter what they thought. Because if this fake problem actually exists, it’s existed for decades–which, as every songwriter knows, it hasn’t.
And then of course, there’s the MIC Coalition which is how all this got started from the way I read the tea leaves.
The MIC Coalition is the supergroup of astroturf, a bottomless pit of money and venom built around Pandora, Google, Clear Channel (aka iHeart), the National Association of Broadcasters, and some other smarminess:
CCIA is a member of the MIC Coalition, as you can see.
Never heard of the MIC Coalition? You only think you haven’t, which is astroturf done right. If you attended SXSW this year (or last year) you may have attended a panel moderated by the long-time Washington lobbyist Maura Corbett pushing the astroturf Berklee-ICE “transparency for thee but not for me” proposals from one Panos Panay and wondered to yourself–who is that person and why is she here? Lobbyist for the MIC Coalition, silly. Naturally she disclosed that…no, wait, she didn’t. I know, I sat through the entire panel (Unlocking the Future of Music with Transparency)–the only transparency on that panel was from Alex Ebert (Magnetic Zeros) who pretty clearly was not in on it.
So the MIC Coaltion has an interesting website–they seem to be a major client…sorry…outlet…for Public Knowledge’s recent work product attacking the Copyright Office. That website has this post about the BMI ruling:
MIC Coalition Urges DOJ to Appeal Judge’s BMI Consent Decree Decision
The MIC Coalition released the following statement in response to Judge Stanton’s recent declaratory judgment in the BMI consent decree case:
“Judge Stanton’s abrupt judgment hurts music lovers across America. By overturning DOJ’s correct and necessary affirmation that the BMI consent decree requires full-work licensing, this ruling undermines the decades-old efficiencies provided by the BMI license, ignores the consent decree’s explicit requirement—affirmed by the Supreme Court—that it indemnify the public performance of works in the BMI repertoire, and turns a blind eye to BMI’s own contracts and statements that make unambiguously clear they have, and continue to, recognize the consent decree’s longstanding requirement to license works in their entirety. All of this, while robbing both the Justice Department and interested parties of their due process, since this declaratory ruling was issued off-the-cuff at a pre-motion conference.
“If left to stand, this decision eviscerates the entire purpose of the BMI blanket license, hurting every restaurant, bar, hotel, winery, local broadcaster, digital music service, retailer and other venue that plays music. This judgment does nothing short of create the exact kind of anti-competitive music marketplace our antitrust laws guard against, causing immeasurable harm to these local establishments and services, their many millions of customers, and to the songwriters and musicians to whom their royalty dollars are paid.
“The mission of the Antitrust Division is to promote economic competition. The DOJ staff took this important responsibility seriously, and should vigorously defend their work of more than two years to fully investigate, listen to all parties, and then take appropriate action under the antitrust laws. We urge DOJ to expeditiously appeal.”
Judge Stanton was “robbing the Justice Department and interested parties of their due process”. Really? Funny, that’s just what the songwriters are suing the DOJ about.
“The DOJ staff took this important responsibility seriously”. Really? Here’s what they took seriously:
So once again–Google and Pandora are behind yet another blatant attack on songwriters. What’s different this time is that songwriters are fighting back, thanks to Songwriters of North America and songwriters Michelle Lewis, Thomas Kelly and Pamela Sheyne who are suing the Department of Justice, Attorney General Loretta Lynch and the acting head of the Antitrust Division Renata B. Hesse.
Google and Pandora are doing what multinational corporations always do in litigation–they bring out their shills to talk to the press about an issue that neither the press nor the shills really have any visceral understanding, but which is absolutely clear to songwriters.
Mr. Kafka kind of summed it up:
They’re talking about things of which they don’t have the slightest understanding, anyway.
Franz Kafka, The Trial