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Spotify Class Action Take 2: @stuartdredge: HFA/Rumblefish to handle Facebook’s indie publishers

January 11, 2018 Comments off

[Editor Charlie sez: Remember what Bluewater Music Publishing’s counsel Richard Busch had to say about Spotify?

At the time that Spotify hired HFA, HFA had a database with less than the number of recordings and compositions available in the Spotify library. Between this insufficient database, Spotify’s piecemeal system, and HFA’s own lack of a system capable of complying with the statutory requirements for compulsory licensing, copyright infringement was assured.

Despite knowledge of these deficiencies, Spotify moved forward with a non-compliant system that allowed for massive infringement from its launch in the United States in June 2011.

Not to worry, little people, they’re baaackkkk…..]

Facebook is also announcing a partnership with SESAC and HFA/Rumblefish that will cover songwriters signed to independent publishers, with Rumblefish sharing data with Facebook to help it identify and clear works.

Or, as the social network’s head of commercial music publishing partnerships Scott Sellwood put it, a deal that will offer indie publishers “the opportunity to participate in a new licensing program with Facebook. The program will enable users to upload and share videos with music on Facebook, Instagram and Oculus and allows publishers to be compensated for the use of their music”.

Read the post on MusicAlly

[By the way, does anyone know what the deal is? Or if it will cost more to sign up than you’d ever make?]

 

@musictechpolicy: Facebook’s Music Licenses: What’s Not to Like?

November 21, 2017 Comments off

Facebook pays no royalties for the music that gives significant value to the platform. That’s often a surprising proposition for artists and songwriters, much less the general public.

Yet it is true—hitmakers and new artists, pros and amateurs alike do not get a penny from Facebook and the company doesn’t even attempt to license their work. Why should a multibillion dollar multinational corporation that anchors a large piece of the Internet economy and whose founder is planning on running for President of the United States get to pay music makers in exposure bucks?

The answer is that Facebook, like YouTube and many other user-generated content platforms hide behind the legacy DMCA “safe harbor” and its nonnegotiable, unconscionable, adhesion contract that controls the use of its platform.

Rumor has it that Facebook is evidently coming to the table and is in at least semi-active negotiations with at least some labels and publishers.

One may well ask what took so long—but if it were not for Universal Music Group’s pursuit of Facebook’s infringements through DMCA notices, it’s likely that Facebook would be blithely rolling on its monopolist juggernaut.

On the other hand, this is actually a good time to be negotiating these deals give the Congressional scrutiny of Facebook’s involvement in the 2016 Presidential election campaigns. We have the benefit of public statements by Facebook representatives under oath regarding what they can do and what they so far refuse to do which may come in handy in licensing negotiations.

These negotiations with rights owners may result in what will seem like a very big pop of up-front cash—but is it? And whatever the number, how will that money be distributed to the artists and songwriters that make it happen?

@mekosoff: Silicon Valley’s Tech Gods Are Headed for a Reckoning How Facebook and Google became mercenaries—and now casualties—in the information war. — Artist Rights Watch

October 25, 2017 Comments off

Others in Silicon Valley described [and royalty deadbeat] Mark Zuckerberg as out of touch with reality, unaware of the damage his brainchild has done.

via @mekosoff: Silicon Valley’s Tech Gods Are Headed for a Reckoning How Facebook and Google became mercenaries—and now casualties—in the information war. — Artist Rights Watch

The Flaw Behind Zuckerberg’s Universal Basic Income Scam

October 15, 2017 2 comments

I’m from Facebook and I’m here to help….

Royalty deadbeat Mark Zuckerberg has a new scam that goes way, way beyond “Russian” propaganda.  As he told the assembled elites at…where, else…Harvard:

Our generation is going to have to deal with tens of millions of jobs replaced by automation like self-driving cars and trucks.  But we have the potential to do so much more than that.

Stop there for a moment–what exactly does the last “that” refer to?  What is its antecedent?  The automation, the mass firings…those things that the ruling class would address it self to in its interactions with the common people, the hoi polloi, those poor little Epsilons?  Or the drudgery of dealing with the great unwashed?

But he goes on:

Now it is time for our generation to define a new social contract….we should explore ideas like Universal Basic Income to make sure everyone has a cushion to try new ideas…

His new social contract can be summarized thusly:  Bend over.

A “cushion to try new ideas”?  Really?  You mean when you get fired off off a good paying middle class job because you trained a robot to do your job, a robot owned by say royalty deadbeat Zuckerberg, that you feel great about it because you’ve got a “cushion to try new ideas” like not losing your house.

And just who might pick up the tab for these costs directly attributed to automation?  Directly attributed to the profitable robots owned by Zuckerberg, Sheryl Sandberg, Eric Schmidt, Larry Page and Sergey Brin?

Is the proposal that the cost be borne by the corporations that caused the harm?  Or by all the taxpayers to keep the Great Unwashed under control so they don’t burn down Facebook?

And since the royalty deadbeat brought up self driving cars, who is going to pay for the self driving roads for those self driving cars, you know, the “smart highways” or whatever they call them?

These 21st Century Robber Barrons will expect the taxpayer to pay for those smart roads or if the beneficiaries of the infrastructurer will pay, they will expect to own the roads, no doubt.  So the taxpayer will pay for the roads for the driverless cars that create the automation to creat mass firings and so that the taxpayer will pay Universal Basic Income to quiet down the clingers.

And all with the hand wringing and smarmy piety, the whinging of fake philanthropy.

Now that’s a shakedown Silicon Valley Style.

New Boss Royalty Deadbeat Facebook Wants to Stiff Everyone

March 1, 2017 Comments off

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“我会很高兴今天支付你的汉堡包今天”

“I’ll gladly pay you Tuesday for a hamburger today.”

J. Wellington Wimpy

New boss royalty deadbeat Mark Zuckerberg is suddenly getting  serious about “premium” content licensing, but is bringing pre-1999 thinking to the table.  He’s proposing what’s called the “Wimpy Deal” that takes ones and zeros to a whole new level.  Zeros to the right of the decimal place, that is.

According to Music Business Worldwide:

Yesterday, in an earnings call with investors, Mark Zuckerberg gave the music business yet more reason for [false] optimism.

The Facebook founder once again confirmed his company’s increasing focus on video – while making specific reference to ‘premium content’….

“But there’s also a whole class of premium content. The creators need to get paid a good amount in order to support the creation of that content, and we need to be able to support that with a business model, which we’re working on through ads to fund that.

And the Facebook CFO confirmed the rev share “burger today” approach:

Zuckerberg and Wehner were then asked by Brian Nowak of Morgan Stanley whether Facebook’s content investment would be “more driven on revenue share – or do you see yourselves going out and writing and doing licensing deals?”.

Wehner replied: “Our goal really is to kick-start an ecosystem of partner content in the video tab… and our model is really oriented towards revenue share with creators. We are funding some feed content to get the ecosystem going, but the focus is on rev share.”

Is There Any Future for Revenue Share Royalty Deals?

MTP readers will recall that we have questioned the continued utility of the Dotbomb era legacy Wimpy revenue share deals that both songwriters and artists currently suffer under.  There are many examples of the absurd costs of accounting and reporting on a revenue share basis for per stream rates that don’t have a positive integer before the third decimal place to the right.  Suffice it to say that the transaction costs of receiving and distributing revenue share payments likely exceeds the total revenue paid in almost every case.  And if the mere accounting doesn’t, then the first label audit will, particularly since there is practically no recourse against music services to know how the advertising revenue was calculated.

A revenue share structure is not a business–unless you’re into burger futures.  This got into the house back in the days when nobody paid too much attention to what they were getting up to over there in New Media Land until suddenly streaming was cannibalizing higher margin sales.

We now are seeing cannibalization come home to roost as pre-IPO streaming services gleefully try to convince us that trading a lot of sales of a high margin good for a lot of streams of a very, very low or no margin good is actually healthy for “the music business”.

Services may try to convince everyone that flat money, breakage, technology payments or the IPO shares will make up for the absurdly low royalty rates–aka glass beads and blankets–but artists are less and less interested in selling Manhattan on the cheap.  And I don’t know anyone named “the music business”.  I do know that there are lots and lots of artists and songwriters concerned about cratering royalty checks.

So–if you are wondering why streaming renegotiations have tended to stall, the changing of the guard in New Media Land may not be the only reason, but it’s certainly one of them.  And don’t be surprised to see New Media Land executives recruited by digital services for the big bucks–which probably was the plan all along.  It certainly works for lobbyists.

Nowhere is this phenomenon more pronounced that with the ridiculous YouTube royalty deals which are all based on rev share.

In the middle of this, Facebook has yet to even acknowledge that they need licenses for the music they play on their platform.  Their strong move is to hire a licensing person from YouTube–probably to float the idea of doing the same revenue share deals that are cannibalizing our business.

We know what’s wrong with perpetuating the YouTube debacle with Facebook (or anyone else).  The question is, will new boss Facebook be able to jam this absurd new boss legacy revenue share structure down our throats.

They have now told us they will try, so this might be a good time to tell them we’re not gonna take it.

What Should A Facebook Deal Look Like?

Like any of these situations, Facebook needs to address the past and then pay a license for the future.  Given Facebook’s cavalier attitude about music rights, they’ll not be taking this too seriously.  Unless they’re made to.

Given the opportunity to book a dollar on Tuesday, there are many big rights holders who might look at a payment from Facebook as “found money” or even perhaps as an employment lifeboat.  It wouldn’t be the first time a music executive jumped ship after making a deal with a digital service that suddenly became their employer.

The absolute worst move would be to allow Facebook to make a token payment of what they will view as chump change–literally change paid to chumps–and then let them drag out using recordings and songs with no meaningful compensation or record keeping.

In other words–don’t let them create yet another black box with no transparency.

How much for the past is enough?  Facebook’s Sheryl Sandberg has told us that the $500,000,000 payment Facebook was ordered to pay Oculus is “nonmaterial”.  Good–maybe that’s a place to start, then.

How much for the future?  Whatever it is, it should not be less than Spotify’s free service.  Why?  First of all out of fairness to Spotify.  Why should Facebook get a better deal than Spotify?  But mostly out of fairness to us!  Remember–the focus has been on labels having all this supposed leverage over Spotify who will have a hard time registering an IPO (assuming they haven’t already registered a confidential IPO under the JOBS Act).

Well–if Facebook gets let off the hook at a crucial point in the Spotify renegotiations, then why should Spotify take a worse deal than Facebook?  Maybe the leverage shifts the other way and who could blame Spotify (and others) for piling on at that point.

So Don’t Blow It

Why should it always be Tuesday at Facebook?

A Facebook music license portfolio is a golden opportunity to at least start to get out of the shite revenue share world once and for all, a world we were condemned to long ago by the New Media idiotocracy who bargained away the creator’s birthright.  Facebook is stealing recordings, videos, song titles and artist names.  Why should they get a pass without some serious zeros attached to it?

Zeros to the left of the decimal place for once.

The question is–do you want fairness and transparency or a fast buck with a black box?

 

If $500 million is “nonmaterial” then why does royalty deadbeat Facebook refuse to pay artists and songwriters?

February 8, 2017 Comments off

MTP readers may have seen that Facebook’s Oculus virtual reality division lost a copyright infringement case in a $500,000,000 jury verdict for a variety of claims.  While that seems like a lot of money to me, the verdict was far short of what was at stake. What is interesting about the case for our purposes was not the details (covered by the Hollywood Reporter and a bunch of other outlets if you want to read up on it).

What is interesting is how Facebook reacted to having to pay $500,000,000 for rights.  Particularly since Facebook currently pays zero for music.

According to the Hollywood Reporter:

Facebook COO Sheryl Sandberg on Wednesday told CNBC, “The verdict is non-material to our business.”

A $500,000,000 rights payment is “non-material to our business.”  This really is how the other half lives.  Without going down the rabbit hole on materiality (see the SEC statement on materiality in financial statements here), let us take Ms. Sandberg’s rather breathtaking statement as true, or at least truthy.

What Ms. Sandberg suggests to me is that any rights payment that Facebook might make for songwriters and artists is also likely to me “non-material” to their business, even if that payment were hundreds of millions annually on an industry-wide basis.

It also makes you wonder why a public company for whom a $500,000,000 copyright infringement verdict is “non-material” prefer to be unlicensed royalty deadbeats rather than pay their fair share?  People who have enriched themselves in the public markets that protect their property rights in securities transactions just as the law protects intellectual property–as demonstrated by the Oculus verdict.

Who are these people?

Target Facebook: Is the Social Network Joining the “DMCA License” Group

May 12, 2016 Comments off

Americans are freedom loving people and nothing says freedom like getting away with it.

From Long, Long Time by Guy Forsyth

Facebook is unlicensed.  Let’s be clear about that.  We all know that Facebook profits from music, and some of us know that Facebook not only profits in a general sense from having music on their platform, but they actually sell the artist’s name.

Here’s the evidence from a screen capture of the Facebook “Boost” interface that sells you the names of a seemingly endless number of artists through the “Edit Audience” button:

Facebook Artist Names

 

According to the blame deflectors at Complete Music Update, Facebook is developing its own version of YouTube’s highly porous ContentID file identification tool:

[I]f Facebook is going to rely on those safe harbours…it needs a decent takedown system that allows content creators to control their videos as third parties upload them. The social network has been developing this for a while now, and yesterday formally unveiled Rights Manager, which is basically its version of YouTube’s rights management set-up Content ID.

So there it is–Facebook is joining the “DMCA license” crowd–meaning that by relying on the hopelessly out of date “notice and shakedown” provisions of the U.S. and European copyright law, they help themselves to free “content”.  All the while selling advertising keywords of the names of artists who they don’t pay.

Because that’s the tricky bit–Facebook is 100% unlicensed.

The important bit that is currently missing, however, is the monetisation option that is core to Content ID – ie, if someone uploads your video and has a decent following that might watch it, as a rights owner you can let the video stay but take a cut of any ad revenue subsequent streams generate. Which means Facebook is basically ensuring itself safe harbour protection here – safe harbour law rewrites permitting – while not actually offering a new revenue stream to rights owners in return.

Let’s not perpetuate a myth that CMU perpetuates in this post–that taking a rev share actually means anything if it is coupled with the cost of monitoring Facebook’s billion-plus users 24/7.  Right now, Facebook can use its DMCA license coupled with its market power to depress the desire of the few rights owners who can afford it to send takedown notices in the first place.

That means anyone who doesn’t accept the shakedown is immediately losing money.  And it still doesn’t explain why Facebook should be able to sell artists names as keywords, which is misappropriation and a violation of moral rights. Neither of which are protected by the safe harbor.

Here’s another myth about ContentID–it doesn’t work very well, can be defeated by pitch bending (which is why YouTube has speed controls on their player) and is only available to the elite.  Compared to the massive volume of videos uploaded to YouTube, a very, very small percentage of copyright owners have direct access to Content ID.  According to YouTube:

YouTube only grants Content ID to copyright owners who meet specific criteria. To be approved, they must own exclusive rights to a substantial body of original material that is frequently uploaded by the YouTube user community.

So if this is how Facebook is going to roll, that will be yet another disaster.

From the songwriter perspective, if there are settlements to be done or class actions to be brought against unlicensed uses of music, Facebook has to be on the list.  It’s really just the Wild West over there, if the Wild Bill Hickok lived in a Harvard dorm room.

If we can’t get paid fairly by the so-called “legitimate” companies, then how are they different than Megavideo?

The truth is that Facebook is simply using its vast market power to get away with it.

And that’s also known as…well, something you’d normally like some affection while experiencing.

So, Mark Zuckerberg, give us a kiss then.

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