20 Questions for New Artists Part 2: Performing Rights Society Affiliation

April 30, 2019 Comments off

[For the next few weeks, we’re going to post updated sections from the article “20 Questions for New Artists” by Chris Castle and Amy Mitchell which has been posted various places.  This doesn’t constitute legal advice, or any intent to form the attorney-client relationship. (If you miss an installment, try searching this blog for “20 Questions for New Artists”.)]

There is a bit of strategy involved with affiliating with a songwriter performing rights society in the United States. PROs license and collect royalties for the performance right in your songs, such as a performance on television or radio or live music venues (including in some cases your own performances of your own songs).  Each writer should affiliate with one of the societies although all members of a band or co-writers on a song don’t need to belong to the same society.  This is why you see some songs with both ASCAP and BMI writers.  We will discuss publishing and affiliating your publishing company with a PRO later.  For now, just realize that your publishing company should be affiliated with the same PRO you are affiliated with as a writer.

All the societies have a creative staff. The decision to affiliate with a particular society should be made after the artist/writer has taken some meetings with the performing rights society and decided if there’s more love coming from one than another.

Most of the time we like to wait until the music is fairly well formed and the band has gelled into a working unit before approaching the societies unless there’s a reason to move more quickly, such as getting a film or TV license, or substantial radio/webcasting play. In more experienced bands, the writers will already have an affiliation, so it is a good idea to know this in advance for purposes of servicing the creative staff with new music, competing for slots on compilations and festival shows, etc.

The major U.S. performing rights societies are the American Society of Composers, Authors and Publishers (http://www.ascap.com/), Broadcast Music, Inc. (http://www.bmi.com/), the Society of European Stage Authors and Composers (http://www.sesac.com/) and Global Music Rights (http://www.globalmusicrights.com).

There are, of course, payment differences among the societies.  For detailed background on PRO payments (and many other subjects) we recommend the book Music, Money and Success by Jeff and Todd Brabec available in paperback.

Copyright 2019 Chris Castle and Amy Mitchell. All Rights Reserved.

20 Questions for New Artists Part 1: Bank Accounts/Tax Returns/Accountants

April 28, 2019 Comments off

For the next few weeks, we’re going to post updated sections from the article “20 Questions for New Artists” by Chris Castle and Amy Mitchell which has been posted various places.  This doesn’t constitute legal advice, or any intent to form the attorney-client relationship. (If you miss an installment, try searching this blog for “20 Questions for New Artists”.)

Bank Accounts/Tax Returns/Accountants: A common mistake that bands make is to have all income paid to one band member, which usually results in unnecessarily complex adjustments at tax time not to mention general distrust should disputes arise.  This can be particularly vexing if the band wants to “fire” that band member whose got all the bank records–much better to have the band’s income and expenses paid from a neutral source.  (We will come to “leaving members” later on.)  Even though we will frequently speak of bands, solo artists should keep their business bank account separate,

Check with your bank branch to find out what the bank requires in order to open a bank account in the band’s name or the solo artist’s stage name (usually at least a “doing business as” or “dba” filing with a local government agency of some kind).

The band should find an accountant in your geographical area who is familiar with music issues and band accounting and take a meeting with that accountant (preferably a Certified Public Accountant who will file the band’s tax return). The band’s accountant should be able to advise you on questions such as the tax deductibility of expenses (recording sessions, haircuts, meals and travel, cell phones, etc.); insurance and financial liability issues (not surprisingly, liability issues substantially increase as soon as the band hits the road and starts driving); whether the band should lease or buy that new band van; and how to treat various income streams such as money received from investors, royalty income, merchandise, etc., as well as payment of sales tax, withholding and income tax.

Eventually, the accountant will be responsible for administering the band’s credit card, paying each band member their draw or salary, settling tours, and making sure any roadies or other employees are properly paid under state and federal tax laws.

See Also: Have you Registered with SoundExchange?

Copyright 2019 Chris Castle and Amy Mitchell. All Rights Reserved.

Why Artists Should Care About @AGSNYT: How The Times Thinks About Privacy

April 14, 2019 Comments off

The New York Times has started “The Privacy Project” and kicks off the story correctly with an introspective opinion piece from the boss, A.G. Sulzberger.  We should do the same.

Over the past few years, The New York Times has reported aggressively on the erosion of digital privacy, bringing information to light about the exploitation of personal data that Facebook amassed on its users, about companies buying and selling children’s data, and about phone apps secretly tracking users’ every movement. That reporting helped spur global debate about how society should protect privacy in digital spaces.

Yet all of this journalism was paid for, in part, by The Times’s engaging in the type of collecting, using and sharing of reader data that we sometimes report on. As with a politician railing against high drug prices while accepting campaign donations from big pharma, a news organization cannot talk about privacy on the internet without skeptical readers immediately, and rightly, examining its own practices for signs of hypocrisy. So, as we kick off The Privacy Project, I wanted to share a bit about how The Times itself approaches reader data and privacy.

Like virtually every business on the internet, we collect, use and share data about readers. We make money by using that data to sell advertisements and subscriptions, often working with other companies like Google and Facebook, which allows us to sustain a 1,600-person news operation that reports from more than 150 countries every year.

Google, Facebook, Spotify and their fellow data lords have to a large extent got some pretty big players over a barrel:  They are all dependent to some extent on Google and Facebook’s business model built on the twin pillars of addiction and surveillance.  Artists and songwriters should think about their own role in this unhealthy cycle that feeds on human vulnerabilities and dopamine dependency.  Like the Times, artists drive fans into the waiting arms of data lords who scrape, segment and serve up behavioral data in darkness while fans are focused on content.

In the case of the Times it is content the paper creates and serves up on its own web properties.  But in the case of artists and songwriters, it is the music that the creator or their label or publisher at least ostensibly license to a platform.  And that’s a big difference, because unless that license is a statutory mandate, licenses have a term.  Statutory licenses are favored by platforms (see Music Modernization Act Title I) because the service can force creators to license their works and that license can essentially never be terminated–even iHeart got away with not paying royalties through reorganization bankruptcy followed by an IPO once those messy obligations were washed away through the courts.

Artists are very familiar with another version of this story that we fought and still fight with brand-sponsored piracy.  In that ecosystem–which still exists on a large scale–companies like Google sell advertising on pirate sites that is served against stolen music or movies and then get data served back to them through analytics tools.  (This is why I often say that it’s not that Google pays a low royalty, they actually pay a negative royalty when you take into account their profit from piracy.)

But data scraping of fans that artists drive to licensed platforms is a less frequent topic of discussion.  Like the Times, creators should start thinking about the role they play in driving fans to the clutches of the data lords.  As Mr. Sulzberger says:

The Times…maintains clear internal guidelines about how such data is collected and used. But this control is often more limited than it seems because in many cases, the news organizations that host the trackers don’t know what happens with that information once it is transferred to third parties. Those companies include major platforms like Google and Facebook, smaller companies you’ve never heard of that act as analytics providers and advertising intermediaries, and the individual companies that place individual advertisements. Readers may understandably wonder: What data do these companies have? To whom might they sell it? How might those buyers exploit it?

I ask myself those questions, too, as a publisher and as a person who uses the internet.

I suggest that it’s time to stop asking questions and start demanding answers.  We at least can try to cut them off.

@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.)

Must Read: @RobertBLevine_: Karyn Temple Appointed United States Register of Copyrights @CopyrightOffice — Artist Rights Watch

March 28, 2019 Comments off

In a week of great news for copyright, Karyn Temple has been appointed Register of Copyrights (the head of the U.S. Copyright Office).

via Must Read: @RobertBLevine_: Karyn Temple Appointed United States Register of Copyrights @CopyrightOffice — Artist Rights Watch

Save the Date: @miramulholland Speaking at the UN’s World Intellectual Property Organization in Geneva April 5

March 28, 2019 Comments off

An industry transformed: securing sustainable growth for today’s digital music industry

Friday, 5th April 2019

1pm – 3pm

Geneva, Switzerland

The global music industry has transformed itself through investment and innovation over the past two decades. The recording industry has licensed hundreds of digital music services around the world, driving innovation and providing consumers with access to some 50 million tracks. Meanwhile, artists have gained more choice than ever before in how to reach fans with their music. At the heart of this success are the partnerships between artists and record labels.

Delegates will be presented with key global and regional data from the IFPI Global Music Report (which will be published globally during the week of the SCCR), insights into the partnerships between record companies and artists, and some key challenges to ensuring the sustainable and balanced development of digital music markets around the world.

Next, Graham Henderson will share highlights from Music Canada’s upcoming report on the discrepancy between the value of music accessed by consumers and the revenues returned to the artists and businesses who create it. The report outlines how Canada’s music community has overcome initial skepticism regarding the existence of this discrepancy, known as the Value Gap, and its causes. It examines the key arguments and evidence that have led to widespread acknowledgement of the discrepancy in Canada, and presents a road map to help build a stronger music ecosystem for artists and labels around the world.

The final speaker, Miranda Mulholland, a Canadian musician who runs her own boutique record label, will explain how weak copyright legislation has impaired her career. She will also reflect on the value of record labels in the modern music marketplace, and will demonstrate how artists can help establish a sustainable and functioning marketplace, outlining her own journey as an artist advocate.

Following the discussion, Mulholland will take the stage with Andrew Penner, her musical partner in the band Harrow Fair, to perform their unique blend of folk, country and garage rock music.

Speakers:

Larry S. Miller – Clinical Associate Professor and Director, Music Business Program, NYU Steinhardt School of Culture, Education, and Human Development

Graham Henderson – President and CEO, Music Canada

Miranda Mulholland – Musician, President of Roaring Girl Records, and Music Festival Founder

Performance: Harrow Fair

 

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