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Guest Post by @poedavid: “Dance Like Nobody’s Paying?” Spotify isn’t

[We’re thrilled to welcome David Poe to MTP!]

by David Poe

Spotify’s disastrous “dance like nobody’s paying” ad campaign has now been demolished in the national press, garnering negative coverage in Newsweek, Billboard, NME, Hypebot, and more. Sometimes big corporations slip up and show us what they really think of us, and this was one of those times.  

But what’s Spotify’s plan?  Here, Variety’s Patrick McGuire suggests Spotify’s intent is to divide listeners and musicmakers:

Similar to the way many people bite into a cheeseburger with no consideration for the cow and farm of its origin, campaigns like Spotify’s widens the growing divide between listeners and creators. Audiences intellectually understand that music doesn’t magically materialize out of nothingness for the exclusive purpose of entertaining them, but as music continues its irreversible transition to all things digital, listeners are becoming less aware and interested in how artists create, record, produce, and share music. With a 2017 Nielsen Music report showing that, on average, Americans now spend over 32 hours a week listening to music, it’s clear that music is hugely important in the lives of listeners — just not in ways that provide meaningful visibility and support to musicians.

Ever heard that song “Put another nickel in / In the Nickelodeon”? It’s from 1950 (written by Stephen Weiss & Bernie Baum.)

Everyone loves streaming. But more than half a century later, most streaming services contend that a song isn’t worth a penny. I respectfully disagree.

Because a song isn’t really a song until someone listens to it, no  musicmaker should be faulted for utilizing all available platforms. But streaming in 2019 forces music makers and fans into the middle of a moral hazard. Music enthusiasts should be able to listen to streaming music without having to compromise their scruples, or that of their favorite bands.

Despite the lack of transparency in the music industry, The Trichordist has managed to cobble together an annual Streaming Price Bible.  It is the most credible summary I’ve found on what each streaming service pays, which may impact where Spotify listeners choose to put their dough-re-mi:

2018_streamingbible

How Bad Is it for Music Makers?

You can easily see from the chart what each service pays for recordings.  At about $0.003 per stream, Spotify pays little but has the greatest market share.  At about $0.0002 per stream, Google/YouTube is even worse. 

Very different companies. Their commonality: free music, which has made them rich from ad revenue and data scraping, but mostly from their stock price increasing at the expense of musicmakers. 

Let’s put this in context.  To earn a monthly US minimum wage, an artist on Spotify would need 380,000 streams by some estimates.

To make the same monthly salary as the average Spotify employee, a songwriter would need 288,000,000 streams.

Frozen Mechanicals

For reference, the statutory rate for a song on a CD or download is 9.1 cents — 4.1 cents more than ye olde Nickelodeon of the 1950s. 

FROZEN MECHANICALS 1909-1977

You might say that’s better than the old days—but it isn’t as good as it looks, because the song rate was frozen for 68 years before it began gradually increasing … only to be frozen again in 2009, where it will stay until 2022.

FROZEN MECHANICALS 2009-2022

Clearly, streaming has all but replaced CDs and downloads, but without replacing revenue from songs to musicmakers. 

Money is being made from streaming if you look at it on an industry-wide basis.  But—due to the hyper efficient market share distribution of the “big pool” revenue share accounting instead of a user-centric model (or the “ethical pool,”) individual music makers are far worse off.  More than ever, streaming revenue is not paid to music makers who don’t share in the big advances or Spotify stock. 

You Can’t Compete With Free

The vast majority of Spotify users are in the “free tier”. By offering free access, Spotify artificially distorts the streaming market and disallows competition amongst streaming companies. As musicians have learned the hard way, you can’t compete with free.

Spotify likes to say it’s artist-friendly, a tool for music discovery. 

Guilty of chronic copyright infringement, Spotify was founded by a former pirate.  It’s a corporate ethos built on theft.  The Music Modernization Act essentially gave Spotify a new safe harbor, but its tactics haven’t changed.

There’s additional shadiness here: allegations of gender discrimination and equal pay violation, expensive, state-subsidized offices, executive  bonuses, corporate lobbyists, a dicey DPO and of course, the “fake artist” scandal.

Spotify’s ongoing lobbying campaign against artist rights continues despite the unanimous passage of the Music Modernization Act in Congress last year (and the jury is out on the MMA and Spotify’s safe harbor).  Shocker—Spotify apparently reneged on agreements it made to accept the Copyright Royalty Board’s mandated increase in songwriter pay.  Another bonehead move that was publicly rebuked by songwriters from Spotify’s “secret geniuses” charm offensive, including Nile Rodgers and Babyface.

Spotify was joined by Amazon, Google, and Pandora in “suing songwriters” to appeal the Copyright Royalty Board’s ruling that increased the paltry streaming mechanical rate, which Spotify lawyer Christopher Sprigman argued against in court.  

Apple Music does not have a free tier and yet was the only major streaming service that did not challenge the new royalty (44% more, which means 0.004 instead of 0.003, which is still bullshit.)  

This may be because Apple recognizes that music helped save its ass from financial ruin 20 years ago. Math is not my strong suit, but numbers indicate music (via the iPod, a now-obsolete door stop) generated nearly half of Apple’s accumulated wealth not to mention introducing a new audience to Apple’s other awesome products.

Or it could just be that Apple understands creators and may actually like us.  There’s a thought.  We were early adopters—Macs have been in every recording studio and creative department for decades.   

Apple Music’s intent to increase artist pay to a penny per side is its best yet, but now long overdue.   Which is a shame, because a trillion dollar market cap company could afford to redistribute some wealth.  If Apple offered a fair alternative, most would run screaming from the competition.

The Generational Problem

There are many who are more expert than me, some quoted in this post. I’d rather be staring into space strumming guitar and writing a song than here discussing music and money. 

But I’m concerned for the next generation of artists, especially the musical innovators. Here’s why:

There used to exist a sort of musical middle class. Artists in all mediums expected financial struggle but there was the possibility of making a living and even growing as an independent artist.  That might include a record deal or selling CDs at a gig in order to make it to the next town. 

Songwriters could get an album cut and get by or even do well if the album sold (Jody Gerson has a great explanation of this.)  Musicians of quality could see a light at the end of the tunnel.

Streaming has “disrupted” all of that.

Light’s out. 

Bands’ streaming access may—may—help build an audience that may somehow convince talent buyers to book gigs that route your tour, which is awesome. But sustaining a career is still cost-prohibitive for many. 

Thus the Top 40 is full of the children of the affluent. 

Not children of millionaires: Stevie. Dylan. John & Paul. Aretha.

Those of us who have been making music for awhile will remember the optimistic, 1990s-era “monetize the back end” argument: bands on the road can make up income lost to streaming by selling merch. 

I tour, too. I wish the best to every band who does so. 

But not every musician can travel … or got into music to sell a fuckin hat.

Another common sense rebuttal to “shut up and tour:” INCOME FROM LIVE SHOWS WAS NEVER MEANT TO REPLACE THAT OF MUSIC SALES — plus both have investment costs and overhead to produce.

Gas costs what gas costs. 

Mics cost what mics cost. 

Streaming doesn’t pay what music costs.

Sorry to yell. Just sick of this lie that to make up for streaming losses all recording artists, especially senior citizens, should tour forever. Or the assumption they are all rolling in dough! Tell that to the punk rock drummer, alto player, the cellist, the songwriter. 

Note: It’s almost impossible to buy a new car or laptop that plays a CD. Low income streaming has effectively replaced higher income physical sales. 

So if streaming is to be the primary method of music distribution — if not the only one — then pay artists fairly.  Or it really will be lights out, if not for the huge artists who regularly celebrate stupidity then for the ones whose songs you want played at your funeral.

Without musicmakers, Spotify has nothing. When Spotify says “dance like nobody’s paying,” it’s because they don’t. 

Given support from listeners and lawmakers, this era of economic injustice via streaming may one day be a footnote.  Fans should not be paying for music they don’t listen to which is what has been happening and is a hallmark of streaming gentrification.

Now, listeners must demand fair pay for musicians they claim to love, whether it is higher streaming royalties or a user-centric royalty allocation—or both.

#IRespectMusic 

Must Read by @davidclowery: Google Doxx: Google Funded Groups in 2017 Illegal Doxxing of FCC Chairman — The Trichordist

Editors note #1 – Over the last year, this blog has been reporting on Google’s apparent use of proxies in an attempt to intimidate members of the EU parliament into voting against the proposed EU Copyright Directive. The Copyright Directive requires social media platforms above a certain size to do more to counter copyright infringement […]

via Google Doxx: Google Funded Groups in 2017 Illegal Doxxing of FCC Chairman — The Trichordist

What, Me Worry: The Decline of MAD Magazine and David Simon’s Dire Prediction

July 6, 2019 1 comment

The cover of the first magazine issue of MAD in 1955 bore these prophetic words:

This magazine is vital for you to read and inside you will find an extremely important message from the editors.

Even in its decline, those words are true today but for reasons that are not particularly funny–except perhaps to Marissa Meyer and Arianna Huffington as we will discover.

What did the editors mean at the time?  Well, what else was happening in America in 1955?  Oh, yeah, these guys:

mccarthy_cohn

Think it didn’t take guts to launch a parody magazine in those years?  Think again.

But, unlike the many newsrooms that have simply disappeared with the rise of Google and Facebook, MAD is not going away entirely.   The Hollywood Reporter tells us:

The beloved satire publication will no longer be sold on newsstands after the August issue, and future editions will shift to previously published material with new covers.

In other words, the value in the magazine will be in re-cycling the past, or one might say commoditizing MAD Magazine so it can be monetized online.  The irony here should not be lost on anyone–a major defender of fair use parody and satire is having its bones picked over by the fair use profiteers.  (See Judge Kaufman’s opinion giving MAD a victory in Irving Berlin et al., Plaintiffs-appellants, v. E. C. Publications, Inc., et al. [MAD], Defendants-appellees, 329 F.2d 541 (2d Cir. 1964) (cert. den.) for those reading along at home.)

In a prescient 2008 book review (entitled “Google the Destroyer“) of Nicholas Carr’s The Google Enigma, antitrust scholar Jim DeLong gives an elegant explanation:

Carr’s Google Enigma made a familiar business strategy point: companies that provide one component of a system love to commoditize the other components, the complements to their own products, because that leaves more of the value of the total stack available for the commoditizer….Carr noted that Google is unusual because of the large number of products and services that can be complements to the search function, including basic production of content and its distribution, along with anything else that can be used to gather eyeballs for advertising. Google’s incentives to reduce the costs of complements so as to harvest more eyeballs to view advertising are immense….This point is indeed true, and so is an additional point. In most circumstances, the commoditizer’s goal is restrained by knowledge that enough money must be left in the system to support the creation of the complements….

Google is in a different position. Its major complements already exist, and it need not worry in the short term about continuing the flow. For content, we have decades of music and movies that can be digitized and then distributed, with advertising attached. A wealth of other works await digitizing – books, maps, visual arts, and so on. If these run out, Google and other Internet companies have hit on the concept of user-generated content and social networks, in which the users are sold to each other, with yet more advertising attached.

So, on the whole, Google can continue to do well even if leaves providers of is complements gasping like fish on a beach.

In the case of MAD, Jim DeLong’s theory is still quite applicable–it’s just the creation of the compliments is evidently going to be old material with new covers (possibly user-generated).  And one of the leading and most influential sources of parody and satire is left flopping and gasping for air alongside the Rocky Mountain News and a host of other disappeared newsrooms in the ones and zeroes where no one can hear you scream.

Let’s understand that MAD’s decline is actually very important because it’s symptomatic of a serious harm at work around the world as the scrutiny of elected officials declines directly with the closing of newsrooms and the transmogrification of independent journalism into social media “reporting” that is edited, controlled, filtered and monetized by you know who.  It is well to remember the dire warning from David Simon in 2009 before the U.S. Senate Commerce, Science and Transportation Subcommittee on Communications and Technology.  (David Simon wrote and produced The Corner, The Wire, Treme and was formerly a crime reporter for the Baltimore Sun.)  Mr. Simon told the Senate hearing on the Future of Journalism and Newspapers:

Understand I’m not making an argument against the Internet and all that it offers. But you do not in my city run into bloggers or so-called citizen journalists at City Hall or in the courthouse hallways or at the bars where police officers gather. 

You don’t see them consistently nurturing and then pressing sources. You don’t see them holding institutions accountable on a daily basis. Why? 

Because high end journalism is a profession. It requires daily full-time commitment by trained men and women who return to the same beats day in and day out, reporting was the hardest and in some ways most gratifying job i ever had….

The day I run into a Huffington Post reporter at a Baltimore zoning board hearing is the day I will be confident that we have reached some sort of equilibrium…[but] the next ten or fifteen years in this country are going to be the halcyon era for state and local political corruption….

And the fair use profiteers Marissa Meyer (then still at Google) and Ariana Huffington also on that Senate witness panel were yucking it up.  Maybe it’s because they knew no one was listening to David Simon’s warning about corruption–for some reason.  The subsequent history certainly suggests that if anything David Simon underestimated the extent of the corruption.

russia_medvedev_facebook_zuck

But that magazine is vital for you to read and inside you will find an extremely important message from the editors.  And remember–we were warned.  While they laughed.

David Simon Hearing

What, me worry?

 

 

 

 

Guest Post by Stephen Hollis: South Africa Creative Sectors Petition SA President on Copyright Bill

June 7, 2019 Comments off

[MTP readers will recall that there is a fierce fight going on in South Africa over a new national copyright amendment that is backed by Big Tech but bitterly opposed by South Africa’s creative sector.  South Africa lawyer Stephen Hollis gives us the background and detail.  We’re pleased to have the opportunity to post Stephen’s article to bring everyone up to speed.  Stephen is a member of the Adams & Adams Entertainment Law Group in Johannesburg.]

In what will undoubtedly be recognized as a watershed moment for South Africa’s creative sectors, a broadly representative group of investors, stakeholders and trade and industry associations representing the whole spectrum of our creative industries petitioned President Ramaphosa not to sign the controversial Copyright Amendment Bill into law.

The trade associations include:

  • ANFASA– Association of Non-Fiction Authors of South Africa
  • S.A– Animation South Africa
  • IBFC– Independent Black Filmmakers Collective
  • MPA-SA– Music Publishers Association of South Africa
  • PASA– Publishers Association of South Africa
  • PEN Afrikaans(authors)
  • RiSA – Recording Industry of South Africa
  • VANSA– Visual Arts Network of South Africa
  • WGSA – Writers Guild of South Africa

The Bill, together with the Performers’ Protection Amendment Bill (‘the Bills’), was rushed through Parliament and hastily approved by the National Assembly and the National Council of Provinces.  This, despite grave concerns expressed by stakeholders and investors (locally and internationally), and legal and constitutional experts that the Bill does not meet Constitutional muster, places SA in breach of important international treaties and risks the major destabilization of our already vulnerable creative sectors.

How did we get here?

The Department of Trade and Industry undertook the necessary task of updating our Copyright legislation and our Performers’ Protection Act to bring our laws up to date to meet the challenges of the digital environment and to uplift the plight of our vulnerable creatives and improve their earning potential.  One of the catalysts of change was the 2011 Copyright Review Commission (CRC) report which was commissioned by Minister Rob Davies after a group of musicians petitioned the Office of then President Zuma in a plea for assistance.  The issue then was that, almost a decade after the re-introduction of so-called Needletime royalties for performers featured on sound recordings, no meaningful royalty distributions have been forthcoming.  The commissioned enquiry resulted in a report from Judge Farlam and his team of around 200 pages, containing valuable recommendations on how to improve the plight of musicians, composers, artists and performers in the music industry.

Creatives were therefore understandably enthusiastic, as one of the key driving forces for legislative change was understood to be the recommendations of the CRC report. DTI surprised everyone when the draft Bill introduced a ‘world first’ in that it proposed to introduce ‘user rights’ that would afford users the right to share equally in royalty distributions with musicians, authors, composers and performers.  It also empowered users to transfer copyright out of the hands of current owners of original works.  It further allowed users to tamper with and remove technological protection measures and copyright management information from protected works, including digital works.

It also introduced another ‘world first’ in providing users with arguably the broadest set of copyright infringement exceptions that would effectively provide them with a plethora of new ways they could copy, reproduce, use, access, etc. copyright protected works without the need to pay license fees or market related royalties.  Not only did DTI’s draft Bill allow users to freely copy materials in the educational space, but it introduced a new statutory defence for users to rely upon when a copyright holder felt aggrieved when unlicensed use of protected works was made, called ‘fair use’.

The fair use debate

In what turned into the hottest topic of debate regarding DTI’s game changing proposals for the transformation of our copyright system into a user access-oriented system, was the importation of the controversial fair use doctrine from US law, where it finds its origin.  Without conducting any economic impact assessment or proper research, DTI’s controversial proposal seeks to import this US-statutory defence to copyright infringement into our law without any of the legal checks and balances that makes the system work somewhat well in the US.

Fair use represents a vague and open-ended set of criteria which leaves it to the Courts to determine whether the unauthorized use, copying, etc. of a copyright protected work can be made without a license.  The main counter-balance to this sanctioned authorization for users to make unlicensed use of copyright protected materials in the US, is the remedy that rights holders have in the US to claim statutory damages for infringement, ranging from US$750 to US$150 000 per act of infringement, which can be claimed on top of any real economic harm that can be proved by the rights holder.

In SA, a rights holder can currently only claim damages if it can be proven that the infringer had ‘guilty knowledge’ and the amount of damages is limited to actual economic harm proven or an amount that the rights holder would typically license the work for.  What this means is that an unlicensed user can claim to not have guilty knowledge of infringement until such time as a Court has considered the matter and found that the unlicensed use was indeed infringement.  This effectively pulls the few teeth left from the watchdog that SA creatives and rights holders can call upon to restrain unlicensed use of protected works.

So, while introducing the broadest regime of copyright infringement exceptions into our law, our rights holders’ remedies to prevent infringement is reduced to an all-time low.

Whose interests are served?

Stakeholders in our copyright and entertainment industries were understandably shocked at DTI’s proposals and what was initially thought to be clear drafting errors, were exposed to be a concerted and deliberate effort to weaken our copyright laws to enable users, and government, to make use of copyright protected materials without the need to pay the authors of the works.

When DTI co-hosted an event at a fancy hotel in Pretoria one week prior to the August 2017 Parliamentary hearings with the world’s largest users of copyright protected materials, in ‘Big Tech’, and referred to them as their ‘Partners’ in developing the new legislative proposals, the penny dropped.

While the Big Tech companies from the USA do require legislative reform to allow them to make use of copyright protected materials that do not affect the commercial interests of rights holders in very specific instances, government went too far in developing legislation that would skew the balance entirely in their favour, without any compelling reason, research, policy or impact assessment that might justify such a radical and ‘world first’ departure from the status quo that would weaken copyright protection in SA to an all-time low.

Unguarded statements from high ranking politicians, including the Chair of the National Assembly’s Portfolio Committee on Trade and Industry, Ms. Joanne Fubbs and from former Minister of Trade & Industry, Rob Davies, that the copyright exceptions are justified because text books are too expensive, a hidden policy agenda was revealed.  Government’s ‘free education for all drive’ will be funded by authors of books and works in the educational space.  DTI also legislated that the unlicensed use of copyright protected materials would be allowed for government insofar as it is required for the vague purpose of ‘public administration’.

Where does this leave our Creatives?

The sudden and unexpected departure from focusing on increasing the legal protections for our vulnerable creatives steers SA into uncharted waters. Recently, the EU Parliament voted to address the growing value gap in commercial usages of copyright protected works and introduced a legal responsibility on digital platforms to pay market related royalties for the use of protected works.  In SA, we are moving in the opposite direction in allowing for more unlicensed usages of works.

Government attempts to hide this visceral gutting of our copyright laws behind the electoral promises that creatives will now enjoy more rights, including royalty payments that content production companies will have to hand out on all works that are still in copyright and commercialized in SA, despite the fact that 90%+ of those projects have not yielded any profits.  It rides rough shod over contractual dealings of the past and sends a message to the world that ‘your contract negotiated in SA today may be ripped up by government tomorrow’.

The risk here is that SA content production companies will simply remove works from the market that have not yielded a net profit yet, in order to ensure that they can keep their doors open for business and not pay out monies on past projects that place them in financial risk.   Also, foreign performers would be able to claim against local film, music and other content production companies. Our creatives would no longer be employed or commissioned to create new works by international clients and investors and film and music production companies will move their upcoming projects to other jurisdictions.  Who will suffer from this the most?  The very local creatives that the Bills purport to protect.

Our creatives are effectively being sold down the river with empty promises, on the back of  a map to a pot of gold at the end of the rainbow, that does not exist.

What to expect if the Bills are signed into law

Major disinvestment into our creative sectors will result if the Bills are signed into law as presently worded.  While our creative sectors have warned repeatedly and consistently from the onset that this is the case, these warnings have simply been ignored.  The Publishers Association of South Africa (PASA) was the only party that commissioned an independent economic impact assessment which report was prepared by PwC.  This report warned that our publishing industry would be decimated if the Bill was signed into law, as is, and even though this report was handed to the National Assembly in 2017, government chose to completely ignore the findings, and did not deem it necessary to conduct its own assessment on how the copyright exceptions and fair use would likely impact on our creative industries.

After the National Assembly approved the Bills, the NCOP reportedly received around 1000 submissions in opposition to the enactment of the Bills.  The Chair of the Select Committee deemed it appropriate to allocate one hour to consider the submissions received from stakeholders and creatives’ representatives.  DTI presented to the Committee that the panel of legal and industry experts appointed by the National Assembly gave the Bills a green light.  This was a lie.  None of the four experts did so and they wrote a letter to Minister Davies to object and to request a retraction of that statement.

Even though Dr. Evelyn Masotja (acting DDG of DTI) proceeded to do so on the day that the NCOP considered the Bills, it was not deemed necessary by the Chair of the Select Committee, Mr. Edwin Makue, for a review of the experts’ opinions to be conducted.  The Bills were simply approved in record time and sent to the President for his assent.

Conclusion

While the much-maligned Bills have been railroaded through Parliament on the back of powerful and hidden political agendas, and carrying the fake promises to creatives that their collective plight would be uplifted, the reality is that the enactment of the Bills would destabilize and cause significant harm to our creative sectors and economy.

It would also deter and undermine the new President elect’s objective of breathing new life into our economy by inviting direct foreign investment into our economy and business sectors.  The only ones who would benefit would be those who wish to make use of copyright protected materials without paying license fees or market related royalties to the authors thereof, and without investing in the creation and development of local, original content.

While government, educational institutions and digital platforms are licking their lips in anticipation of the enactment of the Bills, our creative sectors are galvanizing and forming an opposition that would likely launch a legal challenge that would place the irrational, irresponsible and fundamentally flawed legislative copyright reform process in the international spotlight and highlight the ‘state capture’ of yet another important and valuable sector and resource that would harm all South Africans in the long run.

 

The Two Years War: Google’s Polish Footprint Behind Poland’s Lawfare Against Artists over EU Copyright Directive

June 3, 2019 Comments off

Poland has the distinction of being the first country to tip Google’s lawfare strategy against the Copyright Directive–sue to have the whole thing overturned by Court of Justice of the European Union, the “CJEU.”  The CJEU has, among other things, the jurisdiction to  hear an “action for annulment” filed by a EU government like NATO member Poland.

So who is in Google’s Polish footprint?  According to the Google Transparency Project, we find a few revolving door people.  Want to bet one of them knows how Poland came to file their case so soon?

Sylwia Giepmans-Stepien:  Former Junior Officer in Poland Ministry of the Economy

Google Poland 1

Marta Kokoszka: Project Manager, Polish Information and Foreign Investment Agency

Google Poland 2

Marcin Olender, Head of European Union and International Affairs Unit, Polish Ministry of Administration and Digitization

Google Poland 3

Big Door Keeps on Turning: Recent Departure from Google to (where else) Uber: Agata Waclawik-Wejman

Google 4

But it’s not just the old revolving door.  Google has made a substantial investment in Europe, but in particular at the University of Warsaw.

Google Europe

The Google Transparency Project describes Google’s investment in the University of Warsaw:

In early 2014, according to domain registration records, Google expanded its academic relationships in Europe further East, creating the Digital Economy Lab (DELab) at the University of Warsaw.

The program is described as an interdisciplinary institute funded by Google for the implementation of programs concerning the social, economic and cultural consequences of technology.

There is little public information about the extent of the partnership, or the amount of Google’s funding. However, the DELab website does offer some clues.

DELab’s director, Katarzyna Śledziewska, has a distinguished career in European policy and academic circles.  She also serves as a member of another Google-funded initiative, the Readie-Europe Research Alliance for a Digital Economy….

Stay tuned, this case may turn out to be an excellent vehicle to find out more about the extent of Google’s investments.

 

@eLAWnora: The EU’s New Copyright Laws Won’t “Wreck the Internet”

April 2, 2019 Comments off

[Excellent work by Eleonora Rosati in Slate on the EU Copyright Directive.  This new legislation is important to creators around the world because it applies to the exploitation of all copyrights in Europe, not just European copyrights in Europe.]

On Tuesday, at the end of a process that lasted more than two and a half years, the European Parliament adopted the latest version of the EU Directive on Copyright in the Digital Single Market….

Critics have dubbed the directive a “censorship machine” that would harm free speech, impose new obligations on platforms that would be technically impossible for them to comply with, kill memes and GIFs, and ultimately “wreck the internet”….

These concerns are of course serious and need to be carefully considered, because the internet and the way it works are crucial to how we get and share information, and how we participate in culture. But it appears unlikely that this new EU law will irreparably harm the internet and our free speech online. In fact, contrary to these allegations, it makes users’ legal position safer than what is currently the case. In fact, in some cases, the directive will protect users from the risk of legal liability for sharing protected content. 

Read the post on Slate.

The Ennui of Learned Helplessness: Article 13 and the Five Lies in YouTube’s Content ID

March 29, 2019 Comments off

youtube-logo-parody-1

According to Wired (“Don’t believe the hype: Article 13 is great news for YouTube“), YouTube is positioned to be a big winner due to the Article 13 requirement for “upload filters”.  If you’re keeping your brackets for “Most Googlely Journalist” in the post-Article 13 March Madness spin, Wired gets the three point play on this post–there are no upload filters in Article 13, so not quite sure what Wired is getting at here.  But I digress.

Wired tells us:

[Article 13’s upload filters are] likely to be disruptive, for YouTube as for everyone else. There will be mistakes, disgruntled creators and meme-posters, protests against this or that algorithmic decision. But if anyone is going to eventually benefit from this, in the long run, that is YouTube.

Leaving aside the fact that Alphabet, YouTube’s owner, would probably have enough money to invest in licensing agreements with media companies and music labels – YouTube is uniquely positioned to capitalise on the internet’s sudden need for copyright filters. The platform itself has been using a type of copyright filter, its home-brewed Content ID, for over a decade. The algorithm compares newly uploaded footage against a database of registered videos, and demonetises (or takes down) any post containing matching content [which is also not quite right–it allows the user of Content ID to elect to block or monetize, with heavy pressure to monetize and not block].

While there have been instances of manipulation and egregious mistakes, Alphabet has invested more than $100 million in Content ID’s development, and the technology is already used by more than 9,000 broadcasters, movie studios, and music producers globally. [And there it is–we’ll come back to that] A vast number of other companies – virtually, every single platform and website that does not want to fall foul of Article 13 – could soon swell the ranks of Content ID’s users. Rather than an existential threat, Article 13 could wind up being a fillip to YouTube’s finances.

First, let’s dispense with an implication of that last assertion–that YouTube would profit from ContentID by licensing Content ID to third parties.  There is absolutely no evidence that YouTube would do anything remotely like that, and even if they did, Google would likely still control who gets to put their works into ContentID in the first place.  Wired doesn’t actually say this, but a reader might get that implication.

What is more clear is that Wired asserts YouTube would have a competitive advantage over other, smaller perhaps, platforms–not like they already do as the result of Google’s illegal favoring of its own products for which it is being fined billions in Europe.  This due to the nonexistent “upload filters” that are not in the Copyright Directive (aka Article 13) but that the tech press keeps asserting are really there in one of the great gaslighting exercises of all time.

Remember–ContentID has a lot more to do with preserving YouTube’s US-based DMCA safe harbor and getting licenses for premium content (with higher advertising revenue, i.e., CPMs) than it does with some desire to do the right thing.  That sentiment arguably does not exist at Google, YouTube, Facebook or any other Silicon Valley company with the notable exception of Apple.

OLYMPUS DIGITAL CAMERA

Wired blows past the two key facts it its own story.  First, the number of participants in ContentID:  “the technology is already used by more than 9,000 broadcasters, movie studios, and music producers globally”.

This statistic comes from YouTube itself:

Number of Content ID Users

But strangely according to a 2016 story in the New York Times:

YouTube says that about 8,000 companies and organizations have access to Content ID and that independents may get access through affiliated companies and industry groups.

That’s right–the number of users of ContentID has increased–worldwide–by 1,000 in four years.  Any idea how many new videos were uploaded to YouTube in that time?  We may not have that exact number, but we do know this again according to YouTube’s own statistics:

youtube number of views

That’s billion with a B.  So just rough justice, don’t you think that if there are that many videos being viewed on YouTube there would be more than 9,000 worldwide users of ContentID?

The other relevant fact is that Wired breathlessly repeats that YouTube spent $100,000,000 on developing Content ID.  According to Wikipedia (which I tend to believe in this case because it’s their benefactor Google), ContentID cost $60 million to develop by 2016 and as of 2018 Google had spent $100 million on the system.

Allow me to posit that $100 million for a system that can handle the volume on YouTube is chump change.  One reason that it cost so little is that it is working for purpose–it is not intended to catch everything, it is only intended to catch works by the people who sign YouTube’s chump deal or people who are “important” (in the best traditions of YouTube’s founders).

Remember this line from the 2016 NYT story?  “[I]ndependents may get access [to ContentID] through affiliated companies and industry groups.”

So you mean that some artists are more equal than others?

Exactly.

YouTube’s theory according to the NYT is that independent artists (such as five time Grammy-winner Maria Schneider who graced our pages with her groundbreaking essay on YouTube’s sleaze) are not harmed by YouTube’s “catch me if you can” DMCA shakedown because Content ID is widely available.  The implication being if those pesky artists would just use the tools YouTube provides, there would be peace in the valley with sunshine, gum drops and puppy dog tails for everyone with happiness among the subjects of the Unicorn Kings.

The clear implication is that “independents” have nothing to complain about because they can get “access” to ContentID through “affiliated companies and industry groups”.  “Affiliated” in this case means affiliated with YouTube (laughably called “partners”), and that means that the “companies and industry groups” have signed a ContentID license agreement which is essentially a nonnegotiable form contract imposed by Google.

Because Google wants to have the rights to use their IP all tied down.

Ahem.

This is another reason why Wired should not write to the Google press release.

So let’s start with what YouTube actually says about who gets ContentID:

Content ID UseAnd what are the “specific criteria” that copyright owners have to meet for their “substantial body of original material”?

qualifications content id

So that quote from YouTube’s website arguably explains why there’s only 9,000 entities that have access to Content ID on a worldwide basis across all copyright categories (assuming that’s even true).

There’s at least five lies underlying Content ID, all of which you’d miss if you didn’t have the inside baseball insight into the unnecessarily complex Content ID system–and as we know, complexity almost always hides fraud.

Lie #1: Show Me Where I Signed Your Social Contract

The first point is why should artists be required to even deal with Content ID or YouTube at all?  If an artist never consented to being on the site in the first place, why should Google be able to just exploit their work without consent?  Why shouldn’t Google have to have a contract with the artists to exploit their IP?  You know, the way you have to be approved and have a license to use Content ID.  This is a core property rights concept underlying the new Copyright Directive in Europe–we hope that the US follows suit with DMCA reform.

There is tremendous cost associated with engaging with YouTube at all whether you qualify for Content ID or  you don’t.  In fact, as the Trichordist’s Streaming Price Bible demonstrates, YouTube’s royalties are so crappy that it’s entirely possible that the total cost of doing business with YouTube exceeds any royalties you could make–because the cost of dealing with YouTube varies directly with the size of your catalog.

So why shouldn’t artists be able to just say no and keep all of their music (or other work product) off of YouTube?  Every penny spent trying to block unauthorized videos is a penny spent for YouTube’s benefit.  And why is it we have to pay for this?

The truth is that it is not at all apparent that declining the opportunity to license YouTube wouldn’t actually be more profitable than dealing with the incredibly screwed up Content ID and CMS system.

So let’s not assume that Content ID and notice and shakedown are the only possible outcomes here.

Lie #2: Using Content ID Is Not Free

Even though Google doesn’t charge for Content ID, using the system is hardly free, especially for “independents”.  In order to get “access” to Content ID, an independent artist needs to contract with a claiming company–and pay that company anywhere from 20% to 50% of their YouTube revenue.

And let’s be clear–claiming companies exist to fix YouTube’s mistakes imposed on the world due to YouTube’s legacy and highly inefficient DMCA notice and shakedown business.  Every penny spent by an artist through giving a claiming company a revenue share is a penny spent for YouTube’s benefit by an artist capitulating to the notice and shakedown onslaught.

So saying that “independents” have “access” to Content ID through a claiming company “affiliated” with YouTube is a grotesque oversimplification.  There are claiming companies that operate at the more lucrative end of the YouTube doing channel management and MCN or near-MCN business for which they may operate their own in-house advertising sales staff.

The claiming companies in reach of “independents” necessarily have to take a larger share of a smaller revenue stream in order to operate.  And here’s what they don’t do:

Block.

Why do they only monetize?  Because that’s what a revenue share means–revenue.  Using Content ID to just block videos (especially UGC) would only be available for a fee (since there’s no revenue if you block everything).  Independent artists can’t afford to pay a fee to block on YouTube so they typically will capitulate and monetize.

And who benefits from that?  YouTube.

Why would blocking require a fee for service?  If an artist just wants to bail out altogether, then that artist would set the automated controls of CMS to block worldwide.  In order to make that blocking meaningful, there would need to be a lot of manual care and feeding to account for UGC leakage through the very porous Content ID.

That would include techniques like pitch bending to use the curious speed controls on the YouTube player which seem to have one purpose–defeating Content ID.

This is what’s called a royal pain in the trade, so anyone doing that work would have to be paid for the hours and hours and hours it would take to accomplish it.  Since the artist can’t afford to pay someone else to do that work, the artist would need to do it in all their spare time.  Which of course will not be very effective or may not happen at all.

I call this the ennui of learned helplessness.

Lie #3: Artists Cannot Access Content ID

By using the word “access” when it comes to Content ID, YouTube is equivocating yet again.   If you are an independent artist and your distributor has a CMS account (and that’s a small group), do you have access to Content ID?

No.  At best, you can tell your distributor what you do and do not want monetized.  They will only devote so much time to you, however, and they won’t do the manual claiming on UGC, etc., at least not until you get some pretty significant traction on YouTube (meaning over 5,000 views or so on a particular video).

Your distributor will not allow you to get your hands on their CMS or Content ID dashboards.  There’s a good reason for this, which is that the way Google licenses Content ID there’s a good chance that the distributor (such as Tunecore or CD Baby) could never get enough seats for its particular CMS license to allow all the distributed artists to have individual access, and there’s no view in Content ID that would show one artist’s tracks without showing that user all the other artist’s tracks handled by that distributor.

Why?  Because YouTube doesn’t design the system for “independents”.

Lie #4:  Independent Songwriters are SOL

Notice YouTube never talks about independent songwriters having “access” to Content ID.    The closest that an independent songwriter comes to getting access to Content ID is if they opted into the HFA YouTube license connected to the out of court settlement of the class action against YouTube that was a companion case to Viacom v. YouTube (and which wasn’t certified as a class, but is often referred to as a class action by people wishing to avoid using the legal term “putative”).

So ask independent songwriters who opted in to the HFA license how that “access” is working out for them.

Lie #5:  Content ID Is Another Nondisplay Use of Other People’s Stuff

Google has made a subspecialty of acquiring data for one use and actually using it for other purposes–undisclosed purposes.

Remember “GOOG-411”?  This Google product was the “free” Google directory assistance (very similar to Google Voice). Former Googler (and former Yahoo!er) Marissa Meyer told  Info World years ago that GOOG-411 was not intended to be what it appeared to be:

You may have heard about our [directory assistance] 1-800-GOOG-411 service. Whether or not free 411 is a profitable business unto itself is yet to be seen. I myself am somewhat skeptical. The reason we really did it is because we need to build a great speech-to-text model … that we can use for all kinds of different things, including video search.

The speech recognition experts that we have say: If you want us to build a really robust speech model, we need a lot of phonemes, which is a syllable as spoken by a particular voice with a particular intonation. So we need a lot of people talking, saying things so that we can ultimately train off of that. … So 1-800-GOOG-411 is about that: Getting a bunch of different speech samples so that when you call up or we’re trying to get the voice out of video [such as from YouTube], we can do it with high accuracy.

That’s right–Google told you the product was doing one thing, but in actual fact it was always intended to be something entirely different.  The real action was in the background where users couldn’t see it.  If Marissa Meyer hadn’t let it slip in an interview, you might never have known.

If you have a Content ID contract, check out this language in paragraph 2:

By providing Reference Files, you grant Google a non-exclusive, royalty-free, limited license to (a) store, copy (including the right to make temporary cache and storage copies), modify or reformat, excerpt, analyze, use to create algorithms and binary representations, create ID Files and otherwise use those Reference Files, the ID Files and the associated metadata in connection with the System

And there it is:  “otherwise use”.  Pretty broad grant of rights, eh?  You could say that “in connection with the System” is limiting, but how would you ever know what “in connection with” means?

Remember Google Books?  Ever heard of “corpus machine translation“?  Google uses the scans of the tens of millions of books it stole from authors in the background to improve its translation algorithms.  If the authors had brought their case about that, do you think the court would have been so quick to find this obviously massively commercial application a fair use?

Bevo ≠ Unicorn King

Once again, YouTube has scammed their way past artist objections such as those in Maria Schneider’s post and Irving Azoff’s open letter.  I think this is partly because the whole Content ID system is such inside baseball–once you accept the idea that requiring artists to use these legacy DMCA tools is even acceptable, which I don’t.  Reporters just don’t know what questions to ask.

Now they do.

(Some of this post previously appeared on MTP in other posts.)

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