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Fair Pay, Fair Fight: Will the Circle Be Unbroken for Artist Airplay Royalties?

January 31, 2019 Comments off

The Music Modernization Act brought fairness to pre-72 artists who waited 20 years for the government to confirm what everyone knew—that non interactive digital music services like Pandora and Sirius should be paying them performance royalties like everyone else.  Not that they didn’t try–Liberty Media’s lobbyists tried to administer an 11th hour beat down of old guys and dead cats in the Senate in the waning hours of the Music Modernization Act in an unholy alliance with Big Tech in that very special DC room of mirrors led by Oregon Senator Ron Wyden.

So what makes anyone think that we’ll get fairness without a fight after the merger of Sirius and Pandora announced this week, since parent corporation Liberty Media has now managed to consolidate its hold on 34% of LiveNation “…creates what the companies call the world’s largest audio entertainment company…Policy experts also say the merger empowers a company that’s aggressively fought to suppress royalty payments for artists and copyright holders.”

Now that the CLASSICS Act, as inserted in the omnibus MMA, confirmed that those pre-72 artists are entitled to their non interactive royalties, we can recognize that treating pre-72 artists fairly was just another fake concession dreamed up by digital services starting with Sirius and Pandora (and their lobbying group, the Digital Media Association) for something that should have never happened in the first place.  Now we can all turn back to the real test of fundamental fairness—terrestrial performance royalties.

Why wasn’t this fundamental right included in the MMA?  In the run-up to the initial version of the MMA (before CLASSICS and AMP were added to create the omnibus bill that passed), we were all told by the bill’s sales team to forget ever getting a terrestrial royalty.  It was something that was simply never going to happen because the lobbying power of the MIC Coalition was simply too strong.

Bunk.

If you’ve never heard of the MIC Coalition, it is a lobbying group that was assembled in 2015 for the purpose of stopping the Fair Play Fair Pay legislation introduced in the House of Representatives by now House Judiciary Chairman Jerry Nadler.  Google, of course, is a founding member of the MIC Coalition alongside Amazon, NPR, iHeart Media, Pandora, Salem Media Group, Cox Media Group, the NRB Music Licensing Committee, the American Hotel & Lodging Association, the National Association of Broadcasters, the National Restaurant Association, the National Retail Federation, the Educational Media Foundation, the Computer and Communications Industry Association, the Consumer Electronics Association (now Consumer Technology Association) and of course the Digital Media Association.

mic coalition first logo

Shortly after the MIC Coalition was founded, Amazon and NPR resigned from the organization and the Radio Music License Committee, the Brewers Association, and Wine America joined.  Then individual companies removed their logos and the public facing membership became only the trade associations.

mic coalition logo

It must be said, of course, that the MIC Coalition is a Goliath-like array of lobbying muscle.  But that’s kind of the point.  Even so, you’d be a fool not to take it very seriously.  Now for some of the Washington folk, this may seem like time to run up the white flag before Longshanks.  But I’m happy to say that the neither the I Respect Music campaign nor the MusicFirst Coalition have flinched, and I’m just Texan enough to call that a fair fight.  I fully expect that now-Chairman Nadler will want to revisit his Fair Play Fair Pay legislation in the coming days of the new Congress.  We’re behind him 110%.  I for one am ready for the fight and craving the fray.

This new battle was joined with A2IM CEO Richard James Burgess in an op-ed last November that summed up the status quo:

The musicFIRST coalition (A2IM, AFM, Recording Academy, Sag-AFTRA,
SoundExchange, RIAA), has been in negotiations with the NAB (National Association of Broadcasters) under House Judiciary Committee Chairman Goodlatte’s guidance. The objective was a consensus agreement, which the Chairman would enshrine in legislation. Legislation is essential to ensure that artists, musicians, singers, producers, and labels are not only paid for U.S. airplay but also from spins in the rest of the world. It is estimated that these U.S. creators and the U.S. economy are losing hundreds of millions of foreign-trade dollars each year because the NAB has so effectively blocked this legislation.  If such a law should pass, the U.S. would no longer be aligned with countries like North Korea, China, and Iran in suffering a radio industry that doesn’t compensate creators.

Sadly, NAB CEO, Gordon Smith, telegraphed radio’s true intentions on April 9 when he cited “Five Big Wins,” with number three being, “We again fought back attempts by the record labels to tax radio stations simply for promoting and playing the music listeners love to hear.”  In the same speech he boasted, “And, most recently, broadcasters were instrumental in securing $1 billion in legislation passed by Congress to reimburse radio and television stations for their costs during the spectrum repacking process, ensuring viewers and listeners don’t lose access to their stations.”

I find it fascinating that Smith has the gall to refer to a small royalty for the use of our music as a tax (a tax is paid to the government, not to property owners, for the use of their property). Then, in the next breath, he bragged about extracting a billion dollars from our government for the radio industry.

Music on the radio has enriched listeners’ lives and built empires for some radio station owners. We call on Congress to ensure that U.S. music artists and their funders are finally paid their fair share. Let us not enter a second “Century of Shame.”

And SoundExchange CEO Mike Huppe’s Billboard op-ed last December was another call to arms for fair treatment:

Efforts by the music industry to find a common ground of “fairness” with the broadcasters have thus far failed. That is why we need to heed Frank Sinatra’s call to organize and demand that Congress pass legislation to give creators royalties when their music is played on terrestrial radio.

Like the MMA, the terrestrial radio royalty will be a heavy lift in Washington, no joke–particularly after the consolidation of Sirius and Pandora.  And like the MMA, I suspect it will take everyone’s efforts to make it happen.  Unlike the MMA, it’s not an omnibus bill that cuts across our industry with something for almost everyone.  The only reason the MMA didn’t contain the terrestrial royalty is because the consensus view—not mine, but I went along with it—was that terrestrial was a bridge too far.  Now that everyone else got theirs with MMA, the question is who will remember that deal and who will forget their obligations.

We, of course, will be where we always are.  That’s not the question, though.  The question is what is the rest of the MMA coalition prepared to do?  I, for one, certainly know what my expectation of them is going to be, no flinching and no excuses.  We will be watching to see if the circle remains unbroken the next time we are called to stand up and be counted.

And if they don’t we’ll go it alone.

 

 

(A version of this post first appeared in MusicTechPolicy Monthly newsletter.)

@mikehuppe: Broadcast Radio Makes an Ironic Plea for Fairness — Artist Rights Watch

August 8, 2018 Comments off

SoundExchange’s CEO says it’s time radio starts paying all music creators fairly for their work.

On Monday, a group of radio broadcasters penned a letter in support of the National Association of Broadcasters’ (NAB) push for deregulation of the $14 billion radio industry. Their letter was based on the NAB’s petition to the FCC this past June, in which the NAB sought to allow expanded broadcaster ownership of radio stations (i.e., increased consolidation) throughout the country. The NAB’s justification: broadcasters must adjust their business model to the realities of the new streaming world.

As a representative of the many creative parties who help craft music, we are frequently on the opposite side of issues from the NAB. And while I can’t comment on NAB’s specific requests, I was delighted to find so much common ground in their FCC filing in June….

I agree with the NAB that the law should “finally adopt rules reflecting competitive reality in today’s audio marketplace” and should “level the playing field” for all entities in the music economy.

If radio truly wants to modernize, it can start by taking a giant leap into the 21st century and paying all music creators fairly for their work. Stop treating artists like 17th century indentured servants, just so radio can reap bigger profits. If radio wants to have rules that reflect the music industry of today, then that should apply across the board.

We should resolve this gaping unfairness to artists before we begin talking about allowing radio to consolidate even further.

 

Read the post on Billboard

 

Does the Music Modernization Act Codify Exposure Bucks?

January 26, 2018 1 comment

Exposure Bucks

If you’ve followed the Fair Play Fair Pay legislation and the #IRespectMusic campaign, you know that at the heart of the broadcasters’ rationale for not paying performance royalties to artists for over the air broadcast is the “promotion” argument.  Simply put, the broadcasters tell us that the reason that the U.S. should deny artists a performance royalty for over the air broadcast is because of promotional value.  Or what we call “Exposure Bucks.”  Congressman Jerry Nadler and our friend Blake Morgan have been trying to get this wrong righted.

Also recall that the mechanical royalties to be governed by the Music Modernization Act are set by the Copyright Royalty Judges who are tasked with conjuring up a compulsory mechanical royalty rate.  Currently, the judges set mechanical rates based on certain policy factors.  For many years, songwriters have wanted to replace the policy-based method with what’s called “willing buyer/willing seller”–which is a process of divination by which the judges guess at what a willing buyer would pay to a willing seller for a rate.  For a compulsory license.

You know, the rate for which there hasn’t been a free market in over 100 years.

The Music Modernization Act would change the policy factor standard to willing buyer/willing seller but it should not be assumed that the change alone will result in an increased royalty to songwriters.  Particularly because the MMA creates a kind of “willingness Plus” standard that instructs the judges to take several economic factors into account in addition to market place benchmarks.

And also remember that the Music Modernization Act sets a rate for digital streaming only–you know, the pay-to-playlist world of recommendation algorithms that reenforce paid-for playlists and who knows what else in the background to distort listener choices.

There’s another factor here–the Music Modernization Act creates a new mechanical royalty collective agency (kind of like Harry Fox Agency on steroids) that the law mandates all the songwriters in the world authorize to license their songs in the U.S. (unless their songs are subject to a direct license).  The MMA requires digital music services pay for the operating costs of the new collective–another selling point.

Said another way–the fox pays for the locks on the chicken coop designed to keep out the fox.

Who gets to determine how much the services are to pay for the operating costs of the collective?  The Copyright Royalty Judges of course.  Because they are so well-suited to that task.

This cost-shifting alone supposedly will result in more money for songwriters because the costs of collecting and paying will be borne by those paying the royalty.  Which only makes sense as long as those paying the royalty don’t convince the judges that the royalty  they pay should itself be reduced by the cost of the new collective.  See what happened there?

So two moving parts–let’s stay away from reducing royalties based on promotional value that isn’t really promotional and let’s prohibit the judges from taking into account the cost of the collective in setting rates (since the cost-shifting is supposed to be a great trickle down benefit to songwriters and letting services pay with one hand and take away with the other is no saving at all).

Here’s what the MMA actually says about the willing buyer/willing seller divination standard (at p. 10):

The Copyright Royalty Judges shall establish rates and terms that most clearly represent the rates and terms that would have been negotiated in the marketplace between a willing buyer and a willing seller.  In determining such rates and terms for digital phonorecord deliveries, the Copyright Royalty Judges shall base their decision on economic, competitive, and programming information presented by the parties, including—

‘‘(i) whether use of the compulsory licensee’s service may substitute for or may promote the sales of phonorecords or otherwise may interfere with or may enhance the musical work copyright owner’s other streams of revenue from its musical works; and

‘‘(ii) the relative roles of the copyright owner and the compulsory licensee in the copy righted work and the service made available to the public with respect to the relative creative contribution, technological contribution, capital  investment, cost, and risk.’’;

So–unless there is an express prohibition that stops services from asking the judges to reduce royalty rates by a factor representing the cost of the collective–which the judges themselves would have set–then there’s nothing that stops the services from giving with one hand and taking away with the other.  I haven’t found that prohibition in the MMA so far.  Under the relevant language, the services give by paying the costs of the collective, and they take that back by reducing the royalty rate.  This glitch seems to be clearly contemplated by the MMA.

And of course, it certainly looks like the judges are forced to take into account promotional value of streaming services for which at least Spotify are frequently paid already according to reports.  Summing up all the pay to playlist payments may make it easier to calculate the value of promotion on streaming services, but then again the services may not really want to disclose how much of their activity is bought and paid for.

So, it appears that songwriters may actually be worse off under the MMA than they are now.

Help @RepJerryNadler Beat the Cartels because #irespectmusic

September 26, 2017 Comments off

Emmanuel Legrand posted a very informative piece in his newsletter about a speech by Rep. Jerry Nadler at the so-called “Music Biz Association” Music Biz Entertainment & Technology Law Conference Series in New York.

(Some of you may remember the “Music Biz Association” as NARM which is what it was called before it was taken over by representatives from the leading royalty deadbeats of our day: Facebook, Amazon, Spotify, YouTube and Pandora. In fact, the chair of the “Music Biz Association” is from Facebook, the industry leader in screwing artists out of royalties and their name and likeness rights, not to mention fake news.  YouTube parent Google and Pandora are both members of the MIC Coalition cartel that is an effort by Corporate America dedicated to screwing the world’s songwriters and artists through massive lobbying power.  Also known as The Anti-Music Biz Association.  Amazon and Spotify are also represented through their trade association the Digital Media Association which has opposed everything anyone has tried to do to better the lives of creators.)

Mr. Legrand tells us that Rep. Nadler noted the long list of critical creative industries legislation languishing in the Congress:  These include the Register of Copyrights Selection and Accountability Act (HR 1695) which is currently languishing in the Senate after having passed the House with a rip-roaring 378-48 after being opposed by proxies of Music Biz board members.  Nadler’s own Fair Play Fair Pay Act of 2017 (HR 1836) would close the terrestrial performance right loophole for sound recordings; [the CLASSICS Act (HR 3301) to get artists paid statutory performance royalties for pre-1972 recordings that The Turtles have had to sue over at great expense;] “…the Songwriters’ Equity Act, that would simplify the way music is licensed by performance rights organisations; [the Allocation for Producers (AMP Act HR 881); and] the PROMOTE Act of 2017 (HR 1914), which would allow performing artists to opt out of having their music played on the radio if the performing artist is not being paid an agreed-upon performance royalty.”

Let’s be clear about one thing–the real tragedy that would make us all look very stupid would be if after getting the Register of Copyrights bill passed overwhelmingly in the House–after dirty dealing by Representative from Google–the bill simply dies in the Senate because no one will bring it up for a vote or because Senator Wyden (D-Google Data Center) has a hold on it.  The one bill that actually got a vote and was passed by the Judiciary Committee and by the House–fails in the Senate?  

That result would no doubt be thrilling to the Music Biz Association board members from YouTube, Facebook, Amazon and Spotify if for no other reason that the snarky Librarian of Congress is very likely itching to appoint her own Register and give the gesture to the Congress and their little dog, too.  (This would be the Libraian of Congress who is permitting (and I think encouraging) mass NOIs to screw songwriters for the benefit of Amazon, Pandora, Spotify and Google.)

If that Register appointment bill doesn’t get a vote pretty soon, she just might do it, particularly if she got top cover from the MIC Coalition and the Internet Association (assuming the IA can take time away from their important work of protecting Backpage.com and saving the Internet).

And this is not to mention the latest atrocity from the MIC Coalition, the radioactive “Transparency in Music Licensing and Ownership Act” (HR 3350).  That bill destroys statutory damages and attorneys fees awards in copyright infringement cases against special classes of members of the MIC Coalition cartel that appears to be attempting to fix songwriter and artist royalties–at zero by the look of it.  (And those Music Biz Association meetings should recite the antitrust prayer with special fervor given all of the interlocking boards involved and the dominant posistions of Facebook, Google, Spotify, Pandora and of course Amazon.  Someone might come looking.)  For a good summary of what’s wrong with HR 3350 (or as we call it, The Shiv Act) read this open letter by the Content Creators Coalition signed by artist members Melvin Gibbs, John McCrea, Tommy Manzi, Rosanne Cash, Tift Merritt and Matthew Montfort.

Since we’re not mentioning HR 3350, let’s also not mention Music Biz Association board members Amazon, Spotify, Pandora and Google’s millions upon millions of “address unknown” NOIs served on the Copyright Office pursuant to impenetrable filings that screw songwriters to the wall in no uncertain terms.  But wait…Spotify says there’s no such thing as a mechanical royalty….I’m so confused.

Mr. Legrand reports that Rep. Nadler is disheartened by the lack of effort behind these bills:

Nadler said that so far none of these bills have gathered any traction, aside from the Register of Copyrights Selection and Accountability Act, which was voted 27-1 by the Committee before the summer, to be then sent to the Senate where it is stalling.

Nadler added that Goodlatte will stay in his position for less than two more years so something has to happen this year, if anything.

“Time is the enemy,” said Nadler. “Someone has to be pushing and a lot of this stuff is not going through the Judiciary.” However, Nadler wondered whether Goodlatte would go for a comprehensive Copyright Bill that would become his legacy or opt for a selective number of individual bills.

Nadler, as one of the co-sponsors of the bill, would like to see [Fair Play Fair Pay] go through because, as he said, the USA is the only country alongside Iran and North Korea not to grant performance rights on sound recordings for music played on terrestrial radio. To explain he situation owners of sound recordings are facing at the moment, Nadler used the following image: “In a car you can hit three buttons. If you hit FM, music performers do not get royalties. If you then hit satellite radio, performers get a royalty, and if you then hit streaming, performers get a different royalty. It does not make sense.”

Rep. Nadler probably thought he was speaking to an organization that supported his efforts, and indeed in fairness many of the Music Biz Association members do.

However, at least four of the members of both the organization and its board of directors work for companies that have been actively trying to crush songwriters and artists for many, many years.  Pandora, for example, lead the charge against the retirees and the deceased on opposing paying Pandora’s fair share on pre-1972 royalties for sound recordings.  $300 million or so later, it is up to the Congress to fix this loophole.

It’s imporant to note that it takes two to tango–one reason this long list of bills hasn’t moved is because of efforts to stop each of them by companies on the Music Biz Association’s board or the lobbying groups these companies fund to avoid any breadcrumbs leading back to their house.  The MIC Coalition, for example, includes the National Association of Broadcasters who have used their lobbying power to crush artists for decades.

MIC Coaltion 8-15

And it’s not that these companies just oppose legislation to treat creators fairly, it’s that they have in large part formed the MIC Coalition cartel for that exact purpose.  These companies spend millions of dollars lobbying against our interests.  So while we cherish Rep. Nadler’s unflagging support for songwriters and artists (as evidenced by the #IRespectMusic campaign and Blake Morgan’s extraordinary advocacy, for example), it must be said that the Music Biz Association is probably the wrong place to open the kimono because you never know which royalty deadbeat is taking notes in the audience and yukking it up under their breath.

Want to do something about it?  Call your Member of Congress at (202) 224-3121 (or find them on this list for a direct line in the House) AND call both your Senators at (202) 224-3121 (or find them on this list for a direct line in the Senate).  You can also write to your Member by looking them up on the House of Representatives website or to your Senators by looking them up on the Senate website.  (Remember–you have one Member of Congress and two Senators.)

Let’s help our friends like Rep. Nadler defeat the cartels.  Make those phone calls.

IRMAIV Large

 

Reps. Issa and Deutch Introduce the PROMOTE Act

April 5, 2017 Comments off

Congressmen Darryl Issa and Ted Deutch introduced the PROMOTE Act today, a bill that “grant[s] owners of copyright in sound recordings the exclusive right to prohibit the broadcast transmission of the sound recordings by means of terrestrial radio stations, and for other purposes.”

The bi-partisan PROMOTE Act is great news and, as Congressman Issa said:

calls the bluff of both sides in the debate over performance rights. The terrestrial stations playing these works without compensating the artists argue that airtime provides exposure and promotional value, while the artists argue the status-quo allows radio stations to profit on artists’ performances without providing any due compensation. Our bill puts forward a workable solution that would allow those who would otherwise be paid a performance right to opt out of allowing broadcasters to play their music if they feel they’re not being appropriately compensated.

This is a great way to start the negotiation over Fair Play, Fair Pay and resolving the pre-72 issues.

Here’s the SoundExchange statement from Michael Huppe, SoundExchange CEO:

The PROMOTE Act is a positive step forward in the effort to reform a broken and unfair system. On behalf of the 130,000 artists and rights owners we represent, we thank Rep. Issa (R-CA) and Rep. Ted Deutch (D-FL) for supporting the right of America’s creators to be paid when their recordings are used by the $17 billion radio industry. We will persist in our efforts to meaningfully engage with the radio industry to find a solution to this glaring inequity under U.S. law.

 

What’s in the New Fair Play, Fair Pay Act?

March 31, 2017 Comments off

Yesterday Congressman Jerrold Nadler (D-NY) (Ranking Member of the House Judiciary Subcommittee on Courts, Intellectual Property, and the Internet) and  Congressman Marsha Blackburn (R-TN), (Chair of the Energy and Commerce Subcommittee on Communications and Technology), along with Judiciary Committee Ranking Member John Conyers, Jr. (D-MI), Chairman of the House Judiciary Subcommittee on Courts, Intellectual Property, and the Internet Congressman Darrell Issa (R-CA), Judiciary Committee Member Congressman Ted Deutch (D-FL), and Congressman Tom Rooney (R-FL) re-introduced the Fair Play Fair Pay Act.  

This is a purposeful mix of bi-partisan support that’s so refreshing in the current climate.  What brought these Members together was a desire to modernize the U.S. rules governing music licensing for both digital and terrestrial radio broadcasts.  Fair Play Fair Pay brings justice to the artists and musicians whose performances are exploited every second of every day on terrestrial radio with no compensation.

Not only would FPFP disrupt the antiquated legacy rules, it would plug the unintended consequences that has spawned seemingly endless litigation and commercial disruption.  The new bill would establish a performance right and royalty for broadcast radio (with suitable protection for noncommercial stations), give guidance to courts that Congress recognizes that  pre-72 recordings should attract a royalty like any other recording, and protect artists and producers for their share of statutory language while making a clear statement that nothing in the bill is intended to reduce payments to songwriters.

Here is a link to the prior version of the bill from the last session of Congress (HR 1733), and here is the summary of the new bill from Congressman Nadler:

The Fair Play Fair Pay Act would:

  • Create a terrestrial performance right so that AM/FM radio competes on equal footing with its Internet and satellite competitors who already pay performance royalties. This would resolve the decades old struggle for performance rights and ensure that—for the first time—music creators would have the right to fair pay when their performances are broadcast on AM/FM radio.

  • Bring true platform parity to radio so that all forms of radio, regardless of the technology they use, pay fair market value for music performances. This levels the playing field and ends the unfair and illogical distortions caused by the different royalty standards that exist today.

  • Ensure terrestrial royalties are affordable capping royalties for stations with less than $1 million in annual revenue at $500 per year (and at $100 a year for non-commercial stations), while protecting religious and incidental uses of music from having to pay any royalties at all.

  • Make a clear statement that pre-1972 recordings have value and those who are profiting from them must pay appropriate royalties for their use, while we closely monitor the litigation developments on this issue.

  • Protect songwriters and publishers by clearly stating that nothing in this bill can be used to lower songwriting royalties.

  • Codify industry practices streamlining the allocation of royalty payments to music producers.

  • Ensure that artists receive their fair share from direct licensing of all performances eligible for the statutory license.

 

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