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Universal Leads Royalty Deadbeat Facebook Out of the Cold With Precedent Setting Licensing Deal

December 21, 2017 1 comment

This is what happens when you stick to your property rights–Bloomberg reports that Facebook, aka royalty deadbeat, has signed a multiyear licensing deal with Universal Music Group:

Facebook Inc. signed a multiyear licensing deal that lets the social network carry songs and artists from the world’s biggest record label, Universal Music Group, across its platforms.

The deal announced Thursday solves a long-running dispute, with Facebook agreeing to compensate the company and artists including Taylor Swift when users post videos that include copyrighted material. The accord includes Facebook, Instagram and Oculus virtual-reality technology, with Universal saying the company would become a “significant contributor” to the industry.

The deal sets Facebook up as a more direct competitor to Google’s YouTube, the most popular destination online for listening to music. Both technology giants are battling for a bigger share of people’s time, and music rights could help Facebook give users new ways to engage with its services.

The deal appears to cover UGC and no doubt includes both a settlement for the past (“solves a long-running dispute”) as well as a go forward license.  There may well be more settlements and licenses in the offing, but one fact is crystal clear–Universal was the only one of the rights owners that had the guts to stand up to Facebook by bearing down on sending the DMCA notices that allows Facebook to hoist their users as human shields from infringement claims.

As many have noted, Universal’s enforcement team did the thankless yeoman’s work that helped to remind Facebook that not only are there enforcable property rights online and offline, but Facebook would actually do much better for its stockholders and users by cooperating with artists, songwriters, labels and publishers.  It’s possible that Facebook is coming in from the cold and putting aside all that Lessig claptrap that is soooo 1999.   Claptrap that has only resulted in losses as far as the eye can see, not to mention endless hostility and gasoline known as Lyor Fully Leaded.

Credit where it’s due, it must be said that unlike Google or Spotify, Facebook has–so far–avoided the scorched earth litigation that is the hallmark of Silicon Valley’s relationship with artists and songwriters.  That decision had nothing to do with the negotiation team and everything to do with a corporate policy.  So we will see if Facebook is for real.

It also must be said that the Universal deal shows the importance and power of statutory damages.  The only leverage that anyone has against massive infringing by multnational technology companies is the power of statutory damages and attorneys fees provided in the U.S. Copyright Act.  Not everyone has Universal’s heft–class actions based on statutory damages is about the only route that many artists, songwriters, labels and publishers have against systematic and intentional knowing infringers like Facebook.

Major Defeat For Google-Era Justice Department, Huge Victory for Sanity and Songwriters

December 19, 2017 Comments off

Great news today that the appeals court upheld BMI’s ruling by the BMI rate court judge that there is no such thing as 100% licensing under the consent decrees.  Although it’s like winning an appeal that the Sun really does rise in the East (attention Berkeley students), it’s good to put that issue to one side and to poke a stick in Google’s eye.

hesserenata

More on this to come, but who can forget the Kafka-esque insanity of Renata Hesse and David Kully, two former Google-era Justice Department antitrust officials who saddled thier colleagues with one of the most bizarre cases in the history of the music business:  100% licensing under the out of date, anticompetitive and frankly destructive PRO consent decrees.

Hesse and Kully’s behavior was so bad that songwriters actually had to sue the DOJ for, among other things, a brilliantly argued claim for unconstitutional taking of property without just compensation as a result of  what clearly appears to be Google-inspired overreach (see MTP’s timeline on Renata Hesse’s assault on songwriters and Scott Cleland’s timeline on how Hesse always seemed to be there at just the right time and just the right place to protect Google’s interest from the government oversight that Google loved to focus on other people–like those pesky songwriters.)

A little tea leaf reading suggests that there may be some appetite at the DOJ for at least cutting back the consent decrees if not sunseting them altogether, particularly since we have GMR and others trying to get into the PRO market in the US.  (A fact that is probably not lost on the MIC Coalition price fixing cartel which no doubt would like to see any new MRO take over PRO licensing for the true one-stop shop.)

More to say on this once I get a chance to read the opinion.

We all owe a big thanks to BMI for taking the fight to the government despite the odds against prevailing over the MIC Coalition cartel.  Truth may be stranger than fiction, but truth has a way of prevailing if you ride toward the guns.

Now maybe the DOJ could reopen an investigation of the real antitrust violators–Google and the MIC Coalition.

News from the Goolag: NYT Fails to Connect the Dots

December 16, 2017 Comments off

 

News from the oblivious…New York Times reporter Charles McDermid offers us a demonstration of myopia.  In his December 13 “Briefing” column (subtitled “Here’s what you need to know”), Mr. McDermid inadvertently tells us exactly what we need to know, albeit probably not for the reasons he thought.

First, we get a critique of the use of the term “fake news” which he claims is “now in heavy rotation with autocrats and dictators from Venezuela to Cambodia.  In China, Russia, Turkey, Thailand and many other countries, leaders are using it to silence critics and thwart media scrutiny.”  But then Mr. McDermid breathlessly tells us that “Google is opening an artificial intelligence lab in Beijing–a small but symbolic attempt to tiptoe back into the world’s biggest online arena.  Other big technology names have also set up A.I. shops in China to capitalize on growling skills and lavish state support.”

Really.  Any possible connection between these two news items you can think of?

But he goes on:  “Stunned by Beijing’s sudden, rapid campaign to tear down apartment buildings and evict migrants from poorer sections after a devastating fire, an artist began shooting and posting dozens of videos documenting the forced removal of thousands of people.  Now Hua Yong is on the run from the police, moving from city to city, but still posting.”

Well, then.  How’s that AI lab going to work out for Hua Yong?  You can watch this video he posted that he made as he sang happy birthday to his daughter and then was captured by the Chinese police.

I appreciate the irony of Hua Yong posting his videos on YouTube, a Google company.  The fact that YouTube allows him a platform to reach the world does not absolve Google from its cooperation with the Chinese government.

Stump the Band: Robots Gone Wild Movie Quotes

December 16, 2017 Comments off

It’s that time of year again–time  for readers to stump the band with obscure movie quotes.  This time of year when reorders are filled, shows are booked, playlists are frozen and Congress is slouching toward Bethlehem, it passes the time.

Here’s a few we’ve received, if you have some quotes leave them in comments or tweet at @musictechpolicy.  Next week:  Spy movie quotes.

I think these are correct, but defer to Alexa.

Quote:  The minds that planned the Tower of Babel cared nothing for the workers who built it.

Movie:  Metropolis, (Directed by Fritz Lang)

Quote: The mission is too important for me to allow you to jeapordize it.

Movie:  2001: A Space Odyssey (Directed by Stanley Kubrick)

Quote:  Corporate society takes care of everything.   And all it asks of anyone, all it has ever asked of anyone ever,  is not to interfere  with management decisions.

Movie:  Rollerball (Directed by Norman Jewison)

Quote:  And all the manufacturers knew I was doing it, too. But they couldn’t accuse me without admitting they were doing it themselves.

Movie:  Ex Machina (Directed by Alex Garland)

Quote:  Dick, you’re fired.

Movie:  Robocop (Directed by Paul Verhoeven)

 

A Guide to the Department of Justice Ruling on “100% Licensing”

December 11, 2017 Comments off

[Editor Charlie sez:  This is a repost of the original from September 2016 in light of the recent appeal by the Department of Justice.]

By Steve Winogradsky and Chris Castle, all rights reserved.

The recent ruling by the U.S. Department of Justice in United States v. Broadcast Music, Inc. and United States v. American Society of Composers, Authors and Publishers has left many songwriters, publishers, motion picture and television producers and, yes, even lawyers scratching their heads to understand the import of the ruling.  Not to mention Texas Governor Greg Abbott who has written to Attorney General Loretta Lynch asking her to reconsider the DOJ ruling.

The authors have summarized the ruling in the chart that follows.  The thing speaks for itself.

As you will see, the left hand column lists the various roles of a music creator (starting with “Songwriter”) or music user.  The rows describe some of the potential combinations of co-writers who will run afoul of the DOJ’s ruling.  The chart is followed by a list of descriptions of what rule will apply to your situation.

If you find yourself in the left hand column, scan across the rows to see if you fit in any of the co-writer positions.  Then look for which note applies to you in the list of notes below the chart.

For example, if you are an ASCAP songwriter who has co-written with a BMI songwriter (1st box in column and 6th row across), Note E applies to you.

This chart is based on the authors’ interpretations of the DOJ’s statement and is not dispositive or based on a court ruling as there has been none as of this writing.  Obviously, this is not meant as legal advice and you should not rely on it.  This is a complex area that has gotten even more complex, and you should consult with your own lawyers.

For further background, listen to the MTP podcast with Steve Winogradsky, David Lowery and Chris Castle and read Steve’s book Music Publishing–the Complete Guide.  And essential reading on the issue is that evergreen resource for legal research on takings and other government behavior in the digital age, The Trial, by Franz Kafka.

By popular demand, download a copy of this post with the chart here.

 

100% ASCAP or 100% BMI (single writer or all co-writers belong to the same PRO) 100% SESAC and/or GMR

(single writer or all co-writers belong to one of these PROs)

100% Foreign PRO/ASCAP Collects in US 100% Foreign PRO/BMI Collects in US Co-write

ASCAP & BMI

Co-write ASCAP or BMI with Other U.S. PRO Co-write foreign writers, where 1 is represented in the U.S. by either ASCAP or BMI and the 2nd is represented by a different PRO
Songwriter Note A, below Note B, below Note A, below Note A, below Note E, below Note E, below Note E, below
Publisher Note A, below Note B, below Note A, below Note A, below Note F, below Note F, below Note F, below
TV Producer Note C, below Note B, below. Note C, below Note C, below Note G, below Note G, below Note G, below
Film Producer Note C, below Note D, below Note C, below Note C, below Note G, below Note G, below Note G, below
Webcaster Note A, below Note B, below Note A, below Note A, below Note G, below Note G, below Note G, below
TV Broadcaster Note A, below Note B, below Note A, below Note A, below Note H, below Note H, below Note H, below
Radio broadcaster (terrestrial or satellite) Note A, below Note B, below Note A, below Note A, below Note I, below Note I, below Note I, below
Interactive Streaming (Subpart B&C) Note A, below Note B, below Note A, below Note A, below Note J, below Note J, below Note J, below

Notes

A. All songs may be licensed under either ASCAP or BMI’s blanket licenses

B. All songs may be licensed under both SESAC and GMR’s blanket licenses

C. Obtain synchronization licenses from each party for their respective shares, as is current custom and practice. All songs may be licensed under either ASCAP or BMI’s blanket licenses

D. Obtain synchronization licenses from each party for their respective shares, as is current custom and practice. All songs may be licensed under both SESAC and GMR’s blanket licenses

E. Songs may not be licensed under a blanket license from ASCAP or BMI unless the co-writers agree to have only one PRO administer a particular song, which may require restructuring their co-writer agreement and PROs setting up a structure for paying non-member writers. Depending on their songwriter/publisher agreements, writers could issue direct licenses to users upon request and collect performance royalties directly

F. Songs may not be licensed under a blanket license unless the co-publishers agree to have only one PRO administer a particular song, which may require restructuring their co-publishing agreement and PROs setting up a structure for paying non-member writers & publishers. Publishers could issue direct licenses to users upon request (which might include the writer’s share) and collect performance royalties directly

G. Obtain synchronization licenses from each party, as is current custom and practice. Songs may not be licensed under a blanket license unless the co-publishers agree to have only one PRO administer a particular song, which may require restructuring their co-publishing agreement. TV, film or webcaster producer could request directly performance licenses and pay parties directly. If no direct licenses are available and songs are not covered under the blanket license, producer may not include songs in their productions.

H. Songs may not be licensed under a blanket license unless the co-publishers agree to have only one PRO administer a particular song, which may require restructuring their co-publishing agreement. Broadcaster can either require TV & film producers to obtain direct licenses or broadcaster can obtain them directly from publishers (which would include the writer’s share of royalties. If no direct licenses are available and songs are not covered under the blanket license, producer may not include songs in their productions.

I. Songs may not be licensed under a blanket license unless the co-publishers agree to have only one PRO administer a particular song, which may require restructuring their co-publishing agreement. Broadcaster can obtain direct licenses from publishers (which would include the writer’s share of royalties). If no direct licenses are available and songs are not covered under the blanket license, broadcaster may not include these songs in their broadcasts.

J. Songs may not be licensed under a blanket license unless the co-publishers agree to have only one PRO administer a particular song, which may require restructuring their co-publishing agreement. Streaming service can obtain direct licenses from publishers (which would include the writer’s share of royalties). If no direct licenses are available and songs are not covered under the blanket license, broadcaster may not include these songs in their streaming service.

 

 

@krsfow: @theblakemorgan on The Future of What Podcast Talks #IRespectMusic

December 8, 2017 Comments off

A real treat, Portia Sabin talks with Blake Morgan about the #irespectmusic campaign and more, two of my favorite people on the best music business podcast!

 

Must Read Post by @rhettmiller: The Loneliness of the Long Distance Rocker

December 7, 2017 Comments off

Rhett Miller’s important “meet the new boss, worse than the old boss” critique.

In the days of the old business model, there were successful predators at the top of the food chain, but the kids who made the music were hiding down in the bushes with our friends. The local model of music delivery, unlike the giant streaming info-combines that lord over today’s music world, had a strikingly flat hierarchy of striving characters: the club owners, record store clerks, college radio DJs, and rock critics who owed a thousand words to the local weekly. At closing time on any given night in the ’90s you could find any or all of these satellite scenesters mixed in among the proper musicians at the Art Bar in Dallas, behind Club Clearview. We all knew that there was a cutthroat cabal of music industry execs waiting on the top floor of a tower in Rockefeller Center to offer us a lopsided contract, but we also knew that we were the good guys, the proletariat to their bourgeoisie, the Rebel Alliance to their Empire. We had each other’s back. The worst thing we could be expected to do was steal a girlfriend from one of the Buck Pets or envy the Toadies their unexpected national radio play. Those were, as they say, the days.

The Talent Scouts are Bots

It’s all different now. My own observation of the current music industry is colored by my history with the extinct model. I can’t begin to imagine what it must be like to come up in this world of SoundCloud rappers and Swedish hit factories churning out auto-tuned EDM or whatever. Believe me, I’m keenly aware that even these two meager examples must make me sound impossibly old. My point is that if I was a fourteen-year-old depressive nowadays, I’m not sure what would even draw me into the world of music to begin with. The ability to record oneself in a bedroom represents an impressive flash-forward advance in technology, but it also is profoundly isolating. For starters, it negates the very human necessity of convincing small-time investors to fund a session, or the simultaneously joyful and agonizing experience of collaborating with the requisite technicians to make such a recording happen. In short, it eliminates people from the equation. And more to the point, it eliminates all the good people from the equation.

You’ve still got the execs in the tower in Rockefeller Center—only now all the lower floors that used to house the junior execs and the young A&R kids are crammed with barbed wire and land mines. The Artists & Repertoire department has been replaced by a bot that alerts the label chief when an artist reaches a predetermined number of Twitter followers or Facebook likes. This sort of micro-market calculation was once anathema to creativity—it’s the origin of the old punk-rock contempt for “the suits” who moved product on the AM airwaves. Today, however, an obsessive attention to online clicks and listens is all that an independent artist can rely on to outfox the system. Writing a song might now be less important to your success than paying for a hundred thousand imaginary account holders to follow you on social media.

Read the post on The Baffler

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