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

January 31, 2019 Comments off

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

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

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

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

Bunk.

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

mic coalition first logo

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

mic coalition logo

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

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

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

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

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

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

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

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

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

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

And if they don’t we’ll go it alone.

 

 

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

The Music Modernization Act’s New Burdens for Labels Identifying Unmatched Songs — Music Tech Solutions

June 22, 2018 Comments off

The Music Modernization Act is definitely the gift that keeps on giving.  It seems like every time I read it, a new toad jumps out from under a rock.

The latest one I found is a new burden the MMA places on all sound recording owners, large and small.  Why? To help the digital services comply with their obligation to locate song copyright owners in order for the services to keep the new “reachback” safe harbor–what we used to call “copyright infringement” but what is called the “Limitation on Liability” for “Prior Unlicensed Uses” in MMA speak.  This is the retroactive safe harbor given effect on January 1, 2018 regardless of when the bill actually is passed by both houses of Congress and signed by the President, the new safe harbor that prompted the lawsuit against Spotify by Wixen Music Publishing that was filed on December 29, 2017 after word leaked out about what was actually in the MMA.

Here’s the relevant clause (at pages 100-101 of the House bill):

REQUIREMENTS FOR LIMITATION ON LIABILITY.—The following requirements shall apply on the enactment date and through the end of the period that expires 90 days after the license availability date to digital music providers seeking to avail themselves of the [reachback safe harbor]:

‘(i) No later than 30 calendar days after first making a particular sound recording of a musical work available through its service via one or more covered activities, or 30 calendar days after the enactment date, whichever occurs later, a digital music provider shall engage in good-faith, commercially reasonable efforts to identify and locate each copyright owner of such musical work (or share thereof). Such required matching efforts shall include the following:

(I) Good-faith, commercially reasonable efforts to obtain from the owner of the corresponding sound recording made available through the digital music provider’s service the following information:

(aa) Sound recording name, featured artist, sound recording copyright owner, producer, international standard recording code, and other information commonly used in the industry to identify sound recordings and match them to the musical works they embody.

(bb) Any available musical work ownership information, including each songwriter and publisher name, percentage ownership share, and international standard musical work code.

And yes, that is a double “good-faith, commercially reasonable” predicate–a drafting bugaboo of mine.  I guess it means really, really, really good faith and absolutely positively commercially reasonable since they said it twice.

So what this means is that labels are required to provide to digital services a lot of song ownership information that they may or may not have.  For example, if the label licenses in a sound recording and puts the publishing payments on the licensor (very common practice) the information might be “available” but it is just not available to them.

Note that despite the fact that “good faith” and “commercially reasonable” are repeated twice for emphasis, those concepts modify the efforts of the digital service and not the efforts of the label to respond.  (Not surprising, if you believe as I do that the MMA was largely written by the lobbyists for the services and not the publishers or songwriters.)

At a minimum, the clause should be revised to extend the “good faith” and “commercially reasonable” modifiers to the label’s efforts to provide song information.  Having said it twice, why not three times?

There’s also no procedure for how this request is to be made or responded to, nor is there reimbursement of the costs incurred by the label in complying.  There’s also no limitation on liability for the label if it provides the service what turns out to be incorrect information.

Of course, what should really happen is that the entire paragraph (bb) should simply be struck.  It has long been the practice of record companies to refuse to provide publisher information to digital services and it has long been the practice of digital services to not ask for it.

In all likelihood, the services will engage a third party to do their song research, which is covered in the very next clause:

(II) Employment of one or more bulk electronic matching processes that are available to the digital music provider through a third-party vendor on commercially reasonable terms, but a digital music provider may rely on its own bulk electronic matching process if it has capabilities comparable to or better than those available from a third-party vendor on commercially reasonable terms.

Taking a long look at the clause, it seems reasonable to simply strike the entire clause (I) and keep the labels out of it as has long been the practice, and require the services to either use their own systems or hire a vendor.  And that’s where there should be some criteria for what constitutes a proper vendor.  If there’s going to be any work done by the labels, then–as advertised–the digital services should pay the label’s cost of compliance as part of the assessment and the label should have no liability if they happen to not have the song information “available”–in a commercially reasonable manner.

We all want the MMA to work, but we also all want to avoid unfunded mandates imposed by the federal government that create unintended consequences.

via The Music Modernization Act’s New Burdens for Labels Identifying Unmatched Songs — Music Tech Solutions

Trickle Down Innovation Alert: Mr. Pandora the secret censor

October 11, 2012 Comments off

“Have you seen the bigger piggies in their starched white shirts

You will find the bigger piggies stirring up the dirt

Always have clean shirts to play around in.

In their sties with all their backing

They don’t care what goes on around

In their eyes there’s something lacking

What they need’s a damn good whacking.

Everywhere there’s lots of piggies

Living piggy lives… Clutching forks and knives to eat their bacon.”

Piggies by George Harrison.

Hidden in the deceptively named “Internet Radio Fairness Act” is one of the most insidious anti-artist provisions we’ve seen in many years.  Don’t be fooled–these people are trying to silence artists and use lobbying power to cram down terms to satisfy Wall Street.  And if they can outlaw speech by the AFM and AFTRA, just think what Congress can do to the rest of our industry and beyond.

Pandora’s Big Lie

So here’s the latest milk and cookies tripe from behind the Pandora curtain according to Business Week:

“We envision a future in which Internet radio can offer more as the sector grows and innovates — but this is only possible if Internet radio can compete on a level playing field with the other forms of digital radio,” Mollie Starr, a  Pandora spokeswoman, said in an e-mail.”

The Ministry of Truth at Pandora would like you to believe that this is all for your own good, you see, and what’s good for Mr. Pandora is good for “middle class musicians” to borrow a phrase from One of the Most Influential People in the World, Tim Westergren.  (You should also read the excellent reporting by Glenn Peoples “The Truth About Pandora’s Payments to Artists” where Glenn takes apart the latest heaping serving of bunk from the 1% in Pandora’s board room.)

Westergren and Pandora’s Ministry of Truth (or Minitrue as Orwell called it) wants you to believe that Less is More.  Yes, the Chris Anderson crap pile under the Wrong Tail has returned.

This is a tough sell.  Westergren is out there touting how much they pay to specific artists in a very questionable method of calculation according to Glenn Peoples (which makes perfect sense to me) and he’s wrapping Pandora’s name around the names of these artists while he discloses what he would like you to believe they will make–under the current rates.

Here’s the argument: Pandora is so cool because Pandora pays all this money to artists.  And now Pandora is so cool because they want to cut those payments in half by spending big lobbying bucks!!  And it’s good for the artists because the benefits to Pandora (and presumably Sirius and  Clear Channel) will trickle down to “middle class artists”!

Complete mindless crap, right?  Only makes sense on Wall Street in the confines of the 1%.

This line of argumentation is less insidious than it is pitiful.  We feel for Pandora’s lifers who are now being forced to serve The Man 2.0.  It doesn’t justify being a shill for the money, but we get it.

Pandora’s Thumb on the Scales of Justice

But what is more insidious than innovation trickling down their legs is what else is in the Internet Radio Fairness Act.  The Molly Starrs of this world at Pandora’s Minitrue want you to stay focused on the glittering generalities about innovation trickling down and how less is more and so on.  She holds the bright and shiny object in one hand and hopes you are too dumb to notice the knife in the other.

Pandora wants to fire the judges that rule on their rates and reinstall them with judges who they must think will be more pliable. We discussed Pandora’s court packing plan already.  (And they must be pretty confident that they are going to win that part because if they lose those judges they wanted to fire will be ruling on them in a courtroom near them.)

Enter Pandora the Union Buster

But here’s another even more insidious part of IRFA:

Section 5(a)(1)(B): `Nothing in this paragraph shall be construed to permit any copyright owners of sound recordings acting jointly, or any common agent or collective representing such copyright owners, to take any action that would prohibit, interfere with, or impede direct licensing by copyright owners of sound recordings in competition with licensing by any common agent or collective, and any such action that affects interstate commerce shall be deemed a contract, combination or conspiracy in restraint of trade in violation of section 1 of the Sherman Act (15 U.S.C. 1).‘.

You would not necessarily catch this unless you knew about the efforts by Clear Channel and Sirius to enter into direct license agreements with record companies and bypass SoundExchange.  Direct licensing is bad because it allows the record company issuing the direct license to collect the artist’s share of revenue and apply it against unrecouped balances.  SoundExchange protects the artist from this practice and pays artists directly.  Plus, direct licensing essentially guts the ability of artists to audit Pandora and Sirius because SoundExchange conducts collective audits.  Which of course, is an innovation that Pandora and its fellow innovators do not like one little bit.

In fact, Sirius is actually suing SoundExchange and A2IM on this basis because they allege that SoundExchange and some labels had the temerity to stand up and advise their members about the bad effects of direct licensing.  (So did we: See “Clutching Forks and Knives to Eat Their Bacon: How Sirius Wants to Gut SoundExchange“.)

So what Pandora’s lobbyists are trying to accomplish here is to make it illegal with the wave of a lobbyist’s pen “to take any action [including the action of speech] that would…interfere with, or impede direct licensing by copyright owners of sound recordings in competition with licensing by any common agent or collective…”

Aside from the fact that this provision is probably an unconstitutional burden on First Amendment rights of speech and association–you know, CENSORSHIP–this provision would directly prevent artists who own their own recordings from being represented by any collective, whether it’s SoundExchange or a collective they form on their own (unions have an anti-trust exemption under the National Labor Relations Act that not even Pandora wants to touch).

And as we’ve always said, what the tech companies really want is to break up any form of collective that empowers creators and keep us all weak and alone so they can treat us how they like.  If you have any doubts about this, see the Google Books case where Google lawyer Daralyn Durie  tried to force individual authors to bring individual lawsuits against Google instead of acting as a class against the Leviathan of Mountain View.

According to Business Week:

Google attorney Daralyn Durie told Judge Denny Chin in federal court in Manhattan that authors and photographers would be better off fending for themselves because their circumstances varied widely, especially since the copyright issue for authors involves the display of small snippets of text.

Never fear, she was laughed out of court.  That time.

So you can see how the Pandora trickle down innovation approach would further this goal of weakening artists.  In fact, I’d like to hear an explanation from the Congressmen who are proudly carrying this bullying tripe, Messrs Chaffetz and Polis, as to exactly what the purpose of this section is, and what the implications are.  I think you have to be kind of sick to be proud of this obscene overreach.

This collective busting section of IFRA boils down to this formula:

[People who disagree with Pandora] + [cannot interfere or impede Pandora in what Pandora wants to do] + [and they can’t form a collective bargaining group] + [to do things Pandora doesn’t like] = [and if they do so, or conspire to do so, it may be a crime or a violation of civil law] (See DOJ Antitrust Division Criminal Enforcement Manual.)

For example, if Chaffetz and Polis are successful in passing this bit of collective busting overreach, why wouldn’t this kind of law be used by the National Association of Broadcasters to try to prohibit ASCAP, BMI and SESAC from protecting their songwriter members in negotiations?  Or empower various employer groups (public or private) to run to Congress to try to prohibit unions or collectives from advocating for their members on central commercial issues in their industries?

And like the man said:

In their sties with all their backing, they don’t care what goes on around

In their eyes there’s something lacking, what they need’s a damn good whacking.

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