Archive

Archive for the ‘Uncategorized’ Category

@ericdharvey Misses Music Twitter’s Defining Feature: Refuse Licenses and Pay Zero Royalties via @ArtistRights Watch

October 17, 2019 Comments off

Eric Harvey has a great must-read article in Pitchfork about what he describes as “Music Twitter” (“How Twitter Changed Music“).  Mr. Harvey makes that case that Twitter was designed with both music and the music business in mind.  That is certainly true.  Twitter couldn’t be a more perfect way for pop and rap stars to connect with their fans and introduce new music.  If willing to put in the time (aka free labor for Twitter), artists from any genre can find it useful.  Unbelievable numbers of recordings are promoted, linked, streamed and talked about on Twitter.

Mr. Harvey makes a point that many of us probably didn’t know:

When Twitter was dreamed up, in fact, it was with music in mind. “This is why we built this thing! For concerts and music shows!” Noah Glass told fellow co-founder Jack Dorsey in 2006, according to Nick Bilton’s book, Hatching Twitter. At that point, when the site had only a handful of users, Glass and Dorsey road-tested Twitter at Coachella and attempted a partnership with the 2007 VMAs. As the site grew in popularity, Bilton recounts, pop stars made pilgrimages to the company’s modest San Francisco headquarters, like when a couple of Twitter engineers “found a member of the band blink-182, half-asleep and half-drunk, pouring a small bottle of gin into a bowl of Fruity Pebbles cereal, then chowing down on breakfast.”

But after you read the post, I think you may realize that there’s a dog that didn’t bark–despite the fact that some of Jack Dorsey’s best friends may be musicians, Twitter has consistently refused to even accept the premise that the site needs licenses and should pay royalties.  However “intertwined” Twitter may be with the music business, the company steadfastly refuses to acknowledge that value by respecting business of the artists, songwriters, producers, musicians and vocalists who drive what Mr. Harvey shows pretty conclusively is a big chunk of Twitter’s value.

Mr. Harvey dives into the many connections between the company’s founders who designed their product to free ride on the artists they claim to admire.  It is clear that Twitter owes a lot of its success to the star making machinery behind the popular song:

Judging by the numbers alone, Twitter is more deeply intertwined with music than any other industry. Four of the top five—and half of the top 20—most-followed Twitter accounts are solo musicians. More than movie stars or major athletes, whose work is more obviously collaborative and done according to others’ scripts, the pop star/fan relationship maximizes what Twitter does best, fostering emotional connections rooted in the personal authenticity of a single, spectacular figure. This has led to an environment where millions of Twitter users are there purely to serve as foot soldiers in their idol’s digital army, and where the tantalizing (or mortifying) possibility of direct contact is always present.

Maybe it’s time that Twitter did the right thing and stopped abusing the absurdly outdated DMCA safe harbor game of whack a mole.  Please let’s not be told that Twitter’s value is exposure or that data is worth having your rights ignored.  Data may be the new exposure, but you do have to ask how do people like Jack Dorsey sleep at night.

The DMCA Still is Not An Alibi: How is Google Search Like the Ford Pinto?

September 29, 2019 Comments off

Music Technology Policy

YouTube and Google are both fit for purpose, it’s just that the purpose is unfit.

The Pinto Gap

Google frequently defends what I would call the “Pinto Gap”–Google’s business practice named after the notorious Ford Pinto model with the exploding gas tank.  Why the “Pinto Gap”?  Because one would have to believe that Google has determined, just like Ford, that the cost benefit of programming their search algorithm to play whack a mole with artists profits them more than “doing the right thing.”  One day we may find out if there is a “Pinto memo” at Google.

Remember the Viacom case?  Of the few internal YouTube emails that Viacom was able to recover this one from YouTube co-founder Steve Chen sums it up nicely as reported by USA Today:

Viacom says Chen discussed in another instance how YouTube could handle a hot news clip from CNN

View original post 1,695 more words

Rut Roh: @LibraryCongress Hoster Cloudflare Discloses “Incorrect” Submissions to Treasury Dept. Office of Foreign Assets Control For Blacklist Payments by Narcotraficante

September 12, 2019 Comments off

Cloudflare’s drip drip drip:  If we’re caught dealing with criminals it could have a material adverse effect on our business.

As reported by Mengqi Sun in the Wall Street Journal, 8Chan and Library of Congress hosting provider Cloudflare amends IPO documents on September 10 to disclose to the Treasury Department’s Office of Foreign Assets Control violations of U.S. economic and trade sanctions regulations by trading with terrorists and narcotraficante that have been blacklisted by the U.S. but paid money to Cloudflare. AKA blood money.

Isn’t it time for the U.S. Government to at least review any contracts with Cloudflare?  Sounds like a job for the Scooby Doo Gang.

Fortunately, #irespectmusic fan Rep. Ted Deutch was already on top of it and had questioned the wisdom of continuing that contract at a recent House Judiciary Committee oversight hearing.

As we all collectively gasp, ask yourself this question:  If Cloudflare has this problem–why doesn’t Google have a much bigger version of the same problem?

Here’s the except from the amended Cloudflare IPO document (Form S-1 filed with the Securities and Exchange Commission):

We are subject to governmental trade sanctions laws, and export and import controls, that could impair our ability to compete in international markets and subject us to liability if we are not in full compliance with applicable laws.

Our business activities are subject to various economic and trade sanctions regulations administered by the U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) and U.S. export control and similar foreign laws and regulations, including the U.S. Department of Commerce’s Export Administration Regulations (EAR). We incorporate encryption technology into certain of our products, and the encryption products and the underlying technology may be exported outside the United States only with the required export authorizations, including by license, a license exception or other appropriate government authorizations, including the filing of classification requests or self-classification reports. Further, the U.S. economic sanctions laws and export control laws include restrictions or prohibitions on the sale or supply of most products and services to U.S. embargoed or sanctioned countries, governments, persons, and entities. Even though we take precautions and have implemented policies and practices to assist in compliance, there is a risk that we may not be in full compliance with these laws.

In 2019, we learned that we may have failed to comply with certain U.S. export-related filing and reporting requirements and may have submitted incorrect information to the U.S. government in connection with certain hardware exports. Upon learning of these potential violations and associated export control requirements, we promptly initiated a voluntary internal review and are taking remedial measures to prevent similar export control anomalies from occurring in the future. In May 2019, we submitted a voluntary self-disclosure to the Bureau of Industry and Security regarding potential violations of EAR and a voluntary self-disclosure to the Census Bureau regarding potential violations of the Foreign Trade Regulations. These voluntary self-disclosures are under review by the respective agencies.

In May 2019, we submitted a voluntary self-disclosure to OFAC related to our non-compliance with certain economic and trade sanctions programs. Specifically, we identified that our products were used by, or for the benefit of, certain individuals and entities included in OFAC’s Specially Designated Nationals and Blocked Persons List (the SDN List), including entities identified in OFAC’s counter-terrorism and counter-narcotics trafficking sanctions programs, or affiliated with governments currently subject to comprehensive U.S. sanctions. A small number of these parties made payments to us in connection with their use of our platform. Although we have implemented, and are working to implement additional controls and screening tools designed to prevent similar activity from occurring in the future, there is no guarantee that we will not inadvertently provide our products to additional individuals, entities, or governments prohibited by U.S. sanctions in the future. The voluntary self-disclosure is under review by OFAC.

Additionally, we currently provide products to certain OFAC-sanctioned regions based upon general licenses issued by OFAC to engage in such activity. We continue to review the OFAC sanctions and our practices to verify compliance.

These efforts related to export controls and OFAC sanctions could result in negative consequences for us, including costs related to government investigations, financial penalties and harm to our reputation. The impact on us related to these matters could be substantial.

In addition, various countries regulate the import of certain technologies and have enacted or could enact laws that could limit our ability to provide our products and operate our network or could limit our customers’ ability to access or use our platform and products in those countries.

If we are found to have violated the U.S. or foreign laws and regulations, we and certain of our employees could be subject to civil or criminal penalties, including the possible loss of export privileges and fines. We may be materially and adversely affected through penalties, reputational harm, loss of access to certain markets, or otherwise. Obtaining the necessary authorizations, including any required license, for a particular transaction may be time-consuming, is not guaranteed, and may result in the delay or loss of sales opportunities. In addition, changes in our platform, products, or screening process, or changes in export, sanctions, and import laws, could delay the introduction and sale of subscriptions to our products in international markets, prevent customers in certain countries from accessing our platform and products or, in some cases, prevent the provision of our platform and products to certain countries, governments, persons, or entities altogether. Any decrease in our ability to sell our products could materially and adversely affect our business, results of operations, and financial condition.

 

@jameshanley5: ‘It’s a better way’: Deezer unveils User Centric Payment System ambitions #irespectmusic

September 11, 2019 Comments off

[Deezer is getting out ahead of the growing backlash against streaming service royalties with a blog post on the company’s site entitled “Deezer wants artists to be paid fairly.”  Deezer  becomes the first platform to commit to implementing a User Centric system (can we please not start calling it “UCPS”).  I’ll be interested to see their proposal in action.  Deezer does seem to have grasped the core issue of User Centric, whether it’s based on the ethical pool concept or otherwise:  There is no reason for the vast numerical majority of artists to stay in a system that results in fans paying for music they don’t listen to and an ever declining payout for those who are in it.  In the cold light of dawn, the science is in and the artists are out.

Streaming “Catalog” is any release older than 18 months–I cannot tell you how insane that is, but that is a topic for another day.  When you consider that “catalog” makes up a substantial majority of streams, it compounds the need for user centric royalty distribution instead of the current crisis.

Catalog Chart

And if songwriters were given a chance to abandon their legacy revenue share structure that they will be stuck with for years to come in favor of a penny rate as Apple proposed in the CRB Phonorecords III, they’d probably do it, too.]

[Deezer] CEO Alexis De Gemini said Deezer’s market-leading position in its home country had inspired the shift.

“We’re now a very important financier of the creation of music in France,” he said. “The streaming industry right now, through its paying system, generates more revenues towards specific genres loved by younger users, to the point that… important genres for people above 35 and 40 have their artists making less money than expected in the previous world, where each CD was sold, and the money was going artist by artist.

“We have started to take that mission to try and change the way the money is reallocated. It doesn’t have any impact on Deezer turnover in France, nor globally. But we believe it has an impact in the way we impact creativity, hence, the music we will bring to our users in the future.

“Just in France, UCPS is going to have the top streaming artists make, maybe, 10% less revenues. And on the other side, those who are making very weak revenues are going to be maybe making 30% more. We believe that this readjustment, which is tiny, can help a lot of artists who today are not getting any dime from the streaming business.”

Read the post on Music Week.

 

@musictechpolicy Podcast: Eight Mile Style Sues Spotify Under Music Modernization Act

August 30, 2019 Comments off

Chris Castle discussion of Eight Mile Style lawsuit against Spotify under Music Modernization Act (driving with dogs series)

Eight Mile Style v. Spotify Complaint

Meet the New Boss:  Tech Giants Rely on Loopholes to Avoid Paying Statutory Royalties with Mass Filings of NOIs at the Copyright Office

The Time to Hesitate is Through: Amazon’s Thievery Requires Decisive Action

August 28, 2019 1 comment

Emmanuel Legrand reports in his excellent newsletter that:

Music industry trade group the Recording Industry Association of America(RIAA) has asked the US government for tougher measures against infringers, in particular in the online marketplace. The proposal was part of a submission to the US Department of Commerce, as part of its request for comments on the state of the state of counterfeit and pirated goods.

You can read the RIAA’s submission here.  Note that everyone who participates in a recording is screwed by counterfeits including artists, producers, songwriters, musicians and vocalists.

Counterfeiting and pirating of physical music products facilitated by online platforms continues to cause harm to our members. In 2019, we conducted two studies to identify the amount of counterfeit offerings of music CDs on popular online platforms, including a study on the prevalence of high quality counterfeit box sets on certain platforms and a study on the prevalence of high quality counterfeits for a broad sample of current and evergreen album titles released by the major U.S. record labels. As further discussed below, each of these studies showed significant counterfeit activity on the noted online platforms, including findings that:

  • A recent sample purchase program found 100% of new high quality box sets offered for sale through eBay or AliExpress in the U.S. were counterfeit; and
  • A recent sample purchase program found 11% of new CDs offered for sale on Amazon were counterfeit, and 16% of new CDs sold on eBay were counterfeit.For the study on box sets of music, we identified and made test buys on eBay and AliExpress’s U.S. platforms of 10 well known artist box set titles released by major U.S record labels. Each purchase was made after a search for “brand new” box sets of the titles selected, and a purchase of the 4 lowest priced box sets on each platform, without regard to seller location. We then examined the products that were shipped to us. On both eBay and AliExpress, 100% of the test buys of the box sets were counterfeit. This is of particular concern as box sets are premium physical music products designed for the superfan that often contain the most significant sound recordings in an artist’s repertoire.

The conclusion is:

Trafficking of counterfeit and pirated goods, whether in the form of physical CDs, box sets or artist merchandise, as well as online infringement of music and music videos in digital form, continues to significantly impact the music industry. We believe more can be done, including implementation of voluntary measures as well as governmental action, to deter and reduce such activity, and create a healthier online ecosystem where all can thrive.

Amazon apparently was the only one of the bootleggers who responded, and did so with the usual non answer and deflection:

Our customers expect that when they make a purchase through Amazon’s store—either directly from Amazon or from one of its millions of third-party sellers—they will receive authentic products. Amazon strictly prohibits the sale of counterfeit products and we invest heavily in both funds and company energy to ensure our policy is followed. We work with and empower brands through programs like Brand Registry, Transparency, and Project Zero to ensure only authentic products are sold in our stores. We investigate any claim of counterfeit thoroughly,including removing the item, permanently removing the bad actor, pursuing legal action or working with law enforcement as appropriate.

Sound familiar?  Kind of like how YouTube responds to the community flagging?  Investigating after the illegal goods are being sold is not the point.  Getting caught is not the point.  The point is stopping the illegal goods from getting onto the platform in the first place.

The reason this drivel from Amazon sounds like tired crap is because it is tired crap.  And crystalizes that they think the problem is getting caught and that what they really want is to keep getting away with it.

And this is where I disagree a bit with RIAA–the time for voluntary measures has passed.  Someone needs to go to jail–someone high up who almost invariably knew what was going on (for example, grand jury documents told the U.S. Attorney for Rhode Island “Larry Page knew what was going on“).

Then we can talk again about voluntary measures to keep their butts out of the slammer–not their pathetic little “Project Zero.”  I got your project zero right here.

Remember the great continuum that has driven homo sapiens for millennia:

FEAR <———> GREED

We need Jeff Bezos closer to the FEAR end than the GREED end.

Remember that data is the new exposure, streaming is the new physical and that both these tropes have something in common–artists are being driven to substitute away from low to no margin streaming and away from sustainable margins on physical like CDs with no revenue replacement.  (Unless you’re in the 5% of tracks that account for 90% of streaming revenue in the hyper efficient market share distribution of streaming revenue.)

Against that background, we find that the online platforms like eBay, Alibaba and Amazon are going even further toward evil and doing little or nothing in their rush to drive physical retail out of business to stop the sale of counterfeit CDs delivered to your door by Amazon Prime or Ali-express.  And most honest business folk would probably think they are pretty shameless about it and ask how could they get away with sucking up the revenue from counterfeits into their maelstrom of cash?

But before you go down that rabbit hole, you need to understand an important fact about the mind set of Silicon Valley–and it’s the same mindset that gave us both Google and Theranos.  It’s not that they made a choice to do evil.  It’s that they don’t understand there is a choice about doing evil.  It’s how these little soulless people sit in front of Congress and lie and feel good about themselves.  The Internet is their Ring of Gyges and they are unconcerned about justice because their thing is getting away with it, not getting caught and getting richer than Croesus.

Somewhere in their development they lacked the normative guide–or “sherpa” in their case–that should have developed a self-governing code to map their behavior.  Parents, pastors, priests, rabbis, teachers, all failed to make a dent.  These are the kind of people who don’t stop when the European Commission fines them billions.  They don’t care how they treat their employees as long as they’re the richest man in the world.  They don’t care about ripping off artists.  Their reaction to getting caught is not fixing the problem, their reaction is to buy the shillery and try to make us look greedy for expecting them to behave.

If a $5 billion fine didn’t work, how about $50 billion?  Let’s try that.  But even in the Silicon Valley dual class stock system, the corporate royalty might start thinking about offering up an executive to save the company rather than pay truly appropriate fines.

This is why the solution probably isn’t voluntary.  It probably has a lot more zeros on it than any normal person  would think reasonable, or is a court order for very specific behavior, or simply prison.

Artist Glossary of Industry Terms: Re-Recording Restrictions

August 24, 2019 Comments off

If you’ve been following the Taylor Swift situation with her former label, you’ve probably seen the unsurprising news that Taylor plans to re-record some or all of her prior catalog.  This raises the issue of the customary “re-recording restriction” and “re-producing restriction” found in artist and producer agreements respectively.

Re-recording restrictions are designed to give the label that invested in the recordings a reasonable time period to exploit their exclusive rights.  (This may also give Label 1 a chance to benefit if an artist they dropped enjoys new success on Label 2 sparking commercial interest in that artist’s back catalog.)

Here’s what these look like.  First a more negotiated one:

After the Term, Artist shall not, prior to the later of the following dates, perform for any person, firm, or corporation other than us, for the purpose of making Phonograph Records or Master Recordings, any Song which was recorded hereunder or under any other agreement between you or your affiliates and us or our affiliates for which we or our affiliates paid an advance against royalties hereunder or under such other agreement (whether or not in respect to Recording Costs) or which is released by us for commercial sale to the general public no later than six (6) months after the expiration of the Term; provided that if any such Song was recorded in a Master hereunder and we are otherwise entitled to release such Master in Phonograph Record form, prior to performing such Song for any third party for the purpose of making Phonograph Records, you shall notify us of our failure to have so released such Master and we shall have six (6) months after the date of such notice to so release such Master, upon which release the Song embodied in that Master shall be subject to the provisions of this subparagraph, and; further provided that if we fail to so release such Master within that six (6) month period, you shall have the right to perform that Song for any such third party irrespective of the provisions of this subparagraph:  (i) the date five (5) years subsequent to the last date on which a Master Recording embodying that Song was delivered to us hereunder (but a Master or arrangement thereof included on a “Greatest Hits” or “Best of” LP shall be deemed to have been last recorded when such Master was originally recorded; or (ii) the date two (2) years subsequent to the date on which the Term hereof ended.

And then a more plain vanilla one that is not negotiated (“you” refers to the artist’s loan out personal services corporation):

You warrant and represent that you have the sole and exclusive right to the services of Artist as required herein. You warrant and represent that Artist will not perform for any Person other than Label (and neither you nor Artist will license or consent to or permit the use by any Person other than Label of Artist’s name or likeness) for or in connection with the recording or exploitation of any Record embodying a Composition recorded or delivered by Artist under this agreement prior to the later of (i) the date five (5) years after the date of Delivery hereunder to Label of the last Master embodying that Composition, or (ii) the date two (2) years after the expiration or termination of the term of this agreement or any subsequent agreement between Label and you or Artist or any other Person furnishing Artist’s recording services. Your agreement with the individual producer of each Master hereunder will restrict said producer from producing a Composition produced by such individual hereunder on another Master for any Person other than Label for at least two (2) years from the date of Delivery to Label of such Master.

Note that this language includes a flow down requirement for the producer agreement–one that is typically negotiated by the artist engaging the producer (not the label).  So if the artist plans to use their original producer, you want to be sure that the producer’s re-recording restriction is not more restrictive than the artist’s.

There is a long history (particularly in Nashville) of artists re-recording their hits and it is a standard–albeit not that common–practice that could easily be anticipated.

Sometimes this happens significantly after the artist is dropped.  Quick story–in one situation, we were releasing a “best of” compilation with the cooperation and participation of an artist who had been off the label for a good ten years.  It turned out that they had one track we didn’t own that was a big hit.  It would have been nice for the fans to include it on our record.  I asked the releasing label for a license and offered very reasonable terms, including a generous advance that was likely well more than the label would have earned in royalties even under the very fair royalty rate we offered.  The band was ready to go back into the studio and reunite for this recording.

I don’t think the other label believed this when I told them, but we had to impose a deadline on our offer as otherwise we weren’t going to be able to pull all of it off on schedule.  The deadline passed, our offer expired, so the band went in the studio and recorded a great version of the original track–and they did it for costs only because that’s what the artist wanted to do.

The punchline is that you need to listen to your artist, even if they are not on the label.  I always felt that if an artist was someone we thought highly enough of that we got into business with them in the first place, we would always treat them (and their heirs) with that same level of respect, on or off the label, recouped or unrecouped.  For example, I would almost always seek artist consent for either current roster or back catalog master licenses even if we were not contractually obligated to do so, a practice for which I caught hell from PolyGram.  Too bad.

Another answer to the re-recording restriction is that the artist values the label relationship enough that they prefer to come back to the home label and ask to have their back catalog released or licensed back.  It doesn’t always work out that way, but that’s better than having them re-record for someone else.

%d bloggers like this: