Archive

Posts Tagged ‘ascap’

20 Questions for New Artists Part 6: Performing Rights Organization Affiliations

October 27, 2019 Comments off

There is a bit of strategy involved with affiliating with a performing rights organization in the United States. 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 we recommend reading  Music, Money and Success by Jeff and Todd Brabec.

A recent case highlights the competitive nature of the U.S. PROs.  In order to understand the issue in the case of Shane McAnally, you need to know a little bit about how PROs divide up the revenue they receive.  With few exceptions, ASCAP and BMI license music users on a revenue share basis and receive various reports of song usage.  Realize that the PROs don’t divide these license fees on an even pro-rata share.  Instead they use a formula based on a weighting and credit formula.  This includes something called the “Audio Feature Premium Credit” which is a kind of bonus.  In a nutshell, and I’m sure they’d argue about this, but the bottom line is that the more successful you are, the more money you get paid because you are more successful:

Audio Feature Premium Credits (AFP – for audio performances only, where applicable): Songs that earn certain threshold numbers of audio feature credits in a quarter receive additional credits in that quarter. These credits are applied to performances on radio, satellite and audio streaming services.

There’s a certain logic to this–as one Nashville musician/songwriter asked me years ago about mechanical royalties, “if I get double scale for a session, why can’t I get double stat for a song” (meaning twice the statutory mechanical royalty rate).  That ain’t crazy particularly given the sad state of mechanical royalties.

Shane McAnally left ASCAP to join Global Music Rights, or tried to.  As reported in Music Business Worldwide:

Due to internal rules regarding exiting songwriter members, ASCAP continued to license McAnally’s catalog to US radio for two and a half years following his resignation. Yet, according to McAnally (pictured), ASCAP declined to pay him full quarterly bonuses (‘Audio Feature Premiums’) from his biggest hits after he left – despite his co-writers of said songs (and remaining ASCAP members) receiving their share of this extra money.

McAnally’s payments were apparently ‘phased out’ by ASCAP, who paid the writer 100% of his AFP bonus for the first quarter after he left the PRO, but then 75% in the second quarter, 50% in the third quarter, 25% in the fourth quarter – and 0% from then on.

Important: McAnally alleged that this ‘phase-out’ deprived him of $204,612.84 in ASCAP distributions as of his January 2016 accounting statements.

Again according to Music Business Worldwide, Mr. McAnally appealed his case through the rather Kafka-esque appeals process which resulted in a ruling by a panel of arbitrators.

Instead of awarding McAnally the money as an award (again, he actually lost the case regarding how ASCAP applied its policies), the Panel instead ruled that he was owed the exact same amount as ‘costs incurred’.

The Panel concluded: “For the reasons stated in the Comment section of this Award, the Panel has decided to award $204,612.84 to Claimant as costs incurred in relation to its claims which are the subject of this Arbitration.”

MBW quotes ASCAP’s Chairman of the Board and President Paul Williams saying the following:

“ASCAP is of, by and for creators. Our member-elected Board of Directors is comprised of creators and publishers and we care deeply for all of our songwriters. Our priority is to provide the best possible service and to maintain the highest good for all concerned — for every member, from the beginning of their careers to the heights of success.

Our distribution rules are created by the ASCAP Board of Directors and are meant to protect 725,000 members as a whole, and it would be unfair to disregard our rules for the benefit of one songwriter over our broader family. In this singular and unique case, Shane was paid all of the money that he was owed after he left ASCAP and went to GMR….Two full and fair hearings have confirmed this finding. The first hearing was before an independent Board of Review comprised of ASCAP members and the second hearing was before three outside arbitrators selected by Shane and ASCAP.

We were sorry to see him leave the ASCAP family, but we wish him well. Given the results of this thorough review, we believe this case was handled properly and fairly.”

Mr. McAnally’s case is a cautionary tale of how difficult and costly it can be to change PROs which is a process that is infrequent in my experience–so who  you pick for your PRO should be carefully thought out as you’ll probably be in business with them for a very long time.  The full ruling of the arbitrators is here.

Guest Post: ASCAP and the Great Pandora Battle, by Monica Conlon

May 19, 2014 1 comment

[Editor Charlie sez: This is a guest post by Monica Conlon.  Follow her @momusing.  Used by permission, copyright held by the author, any reproductions require the author’s consent.  Monica is Senior Executive Vice President of Creative Affairs and Licensing at Next Decade Entertainment, Inc., an independent music publishing company which she has been privileged to work at since 1991. Her responsibilities include signing new writers, negotiating, drafting and licensing all works published and administered by the company as well as overseeing the distribution of royalties. Some of Next Decade’s clients include Harry Belafonte, the Pure Songs catalog (the band Boston), Gaucho/Sandbox Music (70s R&B catalog with lots of samples in rap and hip/hop), trance/dance writer Jan Johnston (hits with Paul Oakenfold, Tiesto, Paul van Dyk), Bob McGrath (from Sesame Street), Lucy and Carly Simon, Martha Redbone and Aaron Whitby (Martha Redbone Roots Project, THE GARDEN OF LOVE – SONGS OF WILLIAM BLAKE), Marcy Heisler and Zina Goldrich (lyricist/composer of the Broadway bound musical EVER AFTER and the musicals DEAR EDWINA and THE GREAT AMERICAN MOUSICAL) and Vic Mizzy (“Addams Family Theme” and “Green Acres Theme”). She has been a guest lecturer for the Copyright Society, the NMPA/HFA, the Hartt School of Music, the International Intellectual Property Conference at Fordham Law School and the Cutting Edge Music Conference.]

I spent many hours fielding questions and having conversations with songwriters about the recent win by Pandora in the ASCAP rate court. Mostly, the songwriters wondered why there was a battle in the first place and why ASCAP lost. Performance rights licensing (the right to publicly play/perform a song on the radio, television, the Internet, large venues etc.) is one of those areas that songwriters love, but often know little about. They love that the check comes in the mail on a quarterly basis like a miraculous gift and some even call it “mailbox royalties.” They rely on this money heavily even though many would not be able to describe how it is generated or what the rules are in governing the two major Performance Rights Organizations (PROs), ASCAP and BMI.

The Pandora battle revolves around this governing issue. ASCAP and BMI are membership associations which each represent over a half a million songwriters and music publishers in the field of performance rights licensing. ASCAP and BMI each function under consent decrees entered into with the U.S. Justice Department. The current consent decrees require that ASCAP and BMI must grant a license to any potential company or service that wants one. They do not have the right to say “no” to any potential licensee.

If, after they negotiate with any licensee — in this case, Pandora — and the licensee does not like the rates proposed by ASCAP or BMI, the licensee or the PRO has the right to go to federal court in New York to set the rate. This is exactly the tack that Pandora took and what has led us to this current situation. In court proceedings, it is the PRO’s burden to demonstrate that its proposed rate is “reasonable,” but the consent decrees provide no standards for determining “reasonableness.” The ASCAP Rate Court, through Judge Cote, has been consistently ruling against ASCAP since she began her tenure as the sole judge responsible for setting ASCAP license fees in 2009, rejecting the comparable licenses ASCAP has proffered as benchmarks for gauging the reasonableness of its fee proposals and accepting instead the licenses relied upon by Pandora and other ASCAP licensees.

What is particularly upsetting about all of this is the monetary facts revolving around Pandora. The license that Pandora has been functioning under since it entered into its original agreement in 2005 with ASCAP was at a rate of 1.85% of Annual Revenue, with the combined rate for all of the PROs totaling 4.3% of Annual Revenue. This is slightly more than traditional radio broadcasters pay for their ASCAP licenses, and commensurate with what other streaming services had been paying. However, services like Spotify and the new iTunes Radio pay significantly higher rates, ranging as high as a combined 10% of Annual Revenue. Further, the rate that Pandora pays the record labels for the master rights (the artists recording of a particular song) is in the range of 50% of Annual Revenue. Yes, you read that right….the songwriters have been fighting Pandora for them to pay 4.3% of Annual Revenue when Pandora pays the record labels 50% of Annual Revenue for the use of the master recordings of those same songs.

When Pandora complains that they are paying too much in royalties, which is their constant battle cry, the problem is they are paying a huge rate to the record labels. However, they have no recourse or leverage to reduce the rate they pay to the record labels because the labels function independently and their rates for services like Pandora have been determined by another governmental entity, the Copyright Royalty Board. The only royalties that Pandora has access and leverage to reduce are the songwriter royalties because of the way the consent decrees function.

The court costs that ASCAP has paid in fighting Pandora over their streaming rate come somewhere in the range of $5 to $9 million. Pandora likely has paid equivalent legal costs in their battle. Imagine if Pandora hadn’t gone to court over the combined PRO rate of 4.3% and had put that money — at the low end, say $5 million — into paying music publishers and songwriters a fair rate, the rate other streaming services are paying. Maybe then, Tim Westergren, Pandora’s CEO, who loves telling the press how much he adores musicians and songwriters, could honestly say that he is helping them with his streaming music service rather than what he has truly done, which is to almost single handedly upend the entire structure of the performance rights licensing system.

How did Westergren affect the performance rights licensing structure? The music publishers disagree with Judge Cote’s rate of 1.85% of Annual Revenue. In fact, the music publishers thought the combined PRO rate of 4.3% was also too low. The only way to get a higher rate is to pull the digital rights licensing away from the PROs’ control and make direct deals with digital services. This would allow the music publishers not to be governed by the consent decree in matters dealing with digital performance rights licensing. Some of the major music publishers and independent music publishers were in this process of pulling their digital rights with the PROs and EMI Music Publishing, Sony/ATV Music Publishing and Universal Music Publishing even negotiated direct deals with Pandora as they were the first music publishers to pull their digital rights licensing from the PROs. There had been a six month waiting period before any publisher could pull digital rights from ASCAP or BMI.

This process was moving forward for many publishers and then Pandora went to the ASCAP and BMI rate courts, asking those courts to rule that the publishers’ rights withdrawals did not apply to digital services like Pandora that had applied for licenses under the consent decrees. Both rate court judges ruled that the music publishers could not pull just one set of licensing rights (e.g., digital rights) from either ASCAP or BMI. The judges said if the music publishers wanted to license directly, they would have to pull all performance rights licensing from the PROs. No music publisher wants to do that.

Now, the PROs, the music publishers and others are asking the Department of Justice to agree to change the consent decrees so that it is clear that digital rights licensing can be pulled from the PROs. This will mean all digital companies, including Pandora when its current license is up in 2015, will have to negotiate with multiple music publishing companies either to get their services up and running, or to continue to offer their digital music services, because they won’t be able to clear digital performing rights at the PROs alone if the music publishers withdraw their digital rights. It will add a whole new level of rights clearance issues and liability to the process because the lawyers for these new digital companies will have to engage in these direct deals and ensure that they are covered for all of the music repertoire in their client’s digital services.

Before this rate battle began between ASCAP and Pandora, there was no question that all of the music publishers were being represented by the PROs for digital rights licensing.

The future seems precarious to the music publishing/songwriter community. The BMI rate court has yet to take up the Pandora royalty rate issue. If the PROs and the music publishers are successful in modifying the consent decrees, they will have a business solution for getting a higher rate, but it really isn’t a solution for the health and development of building new digital music companies and services. I firmly believe none of this would be happening if Pandora had been a good player with ASCAP. They created this situation and then Judge Cote complemented their bad moves with a totally unworkable decision.

I was at a publisher meeting recently, and the presenter gave some startling figures. He said that last year, Tim Westergren took out over $15 million dollars in stock options for Pandora (the highest amount he could extract in any given year). At the same time, Pandora paid ASCAP a little over $11 million in royalties for access to the entire ASCAP repertoire for the entire year. If this is true, or even slightly exaggerated then how does the guy who owns Pandora receive millions of dollars more in money in one year than all of the ASCAP songwriters and music publishers whose music was featured on his service in that very same year? When you look at it from this perspective, you can understand why there is such an outcry from the songwriter/music publishing community.

The music publishers and the PROs want a workable solution with Pandora and all the digital companies, but they cannot sit idly by and not receive a fair market value for their songwriter’s works in the digital arena. It’s a wild west in licensing right now, what I find so sad is…. it didn’t have to be.

More on Pandora’s Bait and Switch Campaign

June 12, 2013 Comments off

MTP readers will remember the short lived legislation to lower artist royalties that Pandora backed last year.  That was called the “Internet Radio Fairness Act” and it never came to a vote.  The House IP Subcommittee  held a hearing at which, I think it is fair to say, Pandora lost and lost big.

We Will Not Be Moved

This was in no small part to two things:  Artists came together: 125 artists came together to sign an open letter to Congress that supported digital music but rejected Pandora’s lust for profits.

Songwriters also came together and a group of them performed at the House offices to demonstrate how the songwriter royalties that Pandora pays are grotesquely out of whack.  (Right after Pandora, Clear Channel and Google joined together to use their lobbying clout on that legislation, Pandora also sued songwriters to get a lower royalty for them.)

The other event was that independent artist David Lowery of Cracker and Camper van Beethoven challenged Senator Ron Wyden at the Future of Music Policy Summit about the Pandora legislation–and Wyden really didn’t have much of a response.

In short–the artists locked arms and said we will not be moved.

Pandora’s Bait and Switch Campaign:  Pandora Wants to Cut Royalty Payments But Nancy Tarr Doesn’t Tell You That

Pandora got the message–they are now trying to drive a wedge between the stars who are having what passes for hits these days, and the independent artists who aspire to have hits or to at least make a living.  How are they doing this?  By dangling the bait of “promotion” in front of artists who yearn to break in.

Here’s how it starts.  An independent artist will receive this email from Nancy Tarr at Pandora (who lists herself as a “grassroots” consultant to one of the biggest spin factories in DC):

Dear <firstname><lastname> I hope you don’t mind this unsolicited email. I’m reaching out to introduce myself and to start a conversation with you about your music on Pandora and about some broader policy issues.

Tomorrow–Baiting and Switching

How the Rate Court Cottage Industry is Leading to the Destruction of Collective Licensing

January 19, 2013 1 comment

The news that Sony/ATV made a direct deal with Pandora produced some strangely paranoid chatter in the echo chamber.  Sony/ATV can bring Pandora to their knees, getting around the rate court, etc.  I think it’s actually much simpler than that.

What appears to have happened is quite simple–Sony/ATV opted out of letting ASCAP and BMI license their catalog (which now includes EMI so is really quite massive).  This is perfectly legal, nothing shady, although a bit unusual.  They’ve announced they intend to take some digital licensing in house, so everyone should have expected this was coming.

It is perfectly legal because of the antitrust consent decrees that ASCAP and BMI operate under.  A condition of these consent decrees is that every affiliate of ASCAP and BMI retains the right to “opt out” of the blanket licenses (and rates) offered by these societies.  No reason need be given–it is a right that all enjoy.  (SESAC is a private company that does not (yet) operate under a consent decree.)

If a publisher opts out of one license or type of license, they can remain in the blanket license for all other licenses that are in place.  So for example, Sony/ATV can opt out for Pandora, but stay in for broadcast radio or venue licenses.

Why might a publisher opt out of a blanket license?  One reason is financial–they don’t have to pay the PRO collection fee on that revenue stream.  But another reason is that if they stay in the blanket license, then they are subject to rate court proceedings brought against the PRO if negotiations with a licensee (say Pandora) fail.

Rate court proceedings were relatively rare occurances prior to the arrival of Big Tech in our lives.  They have become increasingly common and almost always involve digital services.  In fact, they almost always involve the same lawyers representing the digital services.

Rate court proceedings cost a lot of money.  Millions in legal fees.  And the twist is that if you stay in the blanket license, ASCAP and BMI pretty much have no choice but to submit to the rate court proceeding which is required by their respective consent decrees.  So in this way while the PRO licenses are voluntary–not statutory like the compulsory mechanical license–and the rates are not set by the Copyright Royalty Judges–because they are not statutory rates–the rates are set by U.S. Federal District Courts sitting as rate courts.  (For example, Judge Stanton is the BMI rate court judge in the Southern District of New York.  MTP readers will remember him as the judge in the Viacom v. Google lawsuit who handed Google a complete victory over Viacom at trial in an opinion I found meandering and bizarre, which subsequently was substantially overturned on appeal.)

Rate court proceedings are in many ways similar to the Copyright Royalty Judges and take into account a variety of economic factors, including market rate deals for the same type of license.

Blanket licenses issued by the PROs are one of the great efficiencies in music licensing.  Rate court proceedings gum up the works and undermine the benefit of lower transaction costs in collective licensing.  I wonder if at the end of the day when one takes into account the legal fees and transaction costs concerned when Big Tech fights negotiated rates whether anyone actually comes out ahead.

Meaning if you compare the position of the parties before the rate court black hole and the ultimate rate imposed by the rate court, did the Big Tech company that used its litigation budget to force songwriters into the rate court proceeding actually end up better off?  Or did they just get their jollies from dragging songwriters through costly litigation so that the next time around the PROs were more likely to acquiesce?

One thing that you often hear these Big Tech types say about their direct licenses is that songwriters are better off to not be represented by PROs because even though the direct license rate is lower, it’s more than the songwriter would get through the PRO because they don’t have to pay the PRO “commission”.

Of course, the other benefit from PRO licensing that songwriters get that isn’t discussed is that the songwriters can audit collectively under the PRO’s blanket license.  Big Tech companies hate audits.  The more direct licenses, the less likely that any one songwriter will ever exercise an audit right.  And eventually the audit right will be withdrawn (as is already happening with the YouTube indie publisher license).

So how does this effect Sony/ATV?  Recall that Pandora sued ASCAP in the rate court to try to screw songwriters right about the same time they began their campaign to screw artists in the Congress with the so-called Internet Radio Fairness Act.

If I had to bet, I would bet that Sony/ATV said enough of this BS and withdrew from ASCAP and BMI for purposes of licensing Pandora.  That takes Sony/ATV out of the rate court.  They made a deal with Pandora for a higher rate and shorter term than will ultimately come down in the ASCAP rate court.

Note:  Of course, ASCAP may be able to use the Sony/ATV deal as evidence of a significant market rate for the Pandora service in the rate court, even though Sony/ATV is not party to the case.

Pandora had the choice of excluding all Sony/ATV songs from their service or make a direct deal with the publisher.  And now that Pandora has made that deal once, they will always.

And that’s really all there is to it.

But–if Pandora had not been advised to go to the rate court, would Sony/ATV have made the same decision?

Is Pandora lucky that Sony/ATV didn’t just opt out of the ASCAP and BMI blanket licenses and not license Pandora at all?  That would probably have brought down the service.

And–given the antagonism that was heaped on Pandora by songwriters from outside the US, will the societies representing these songwriters elect to opt out of the reciprocal agreements they have with ASCAP and BMI regarding Pandora and just not license Pandora?

Will other publishers follow Sony/ATV and avoid the rate court?  Won’t that mean that the cost of the rate court will be shared by an ever smaller group of songwriters forced to litigate by Big Tech?

One thing we don’t need is less efficiency and higher transaction costs in music licensing.  Most Big Tech companies and their shills whine about fragmented music licensing, yet the same people drive up those transaction costs while enriching a small group of lawyers who undermine the benefits of blanket licensing.

Do these Big Tech companies have the right to do this?  Sure.  Does it benefit them in the long run to jack songwriters around?  Not really.  If there’s anyone who has an existential threat from Big Tech it is the professional songwriter, often overlooked yet the most important part of the equation.

Continually trying to jack these people around accomplishes one thing:  It hastens the day of full commoditization of culture by Big Tech.  This is what they may think they want, but I would suggest to you that they really don’t.

So they may have the right to do it, but that doesn’t make it smart.  But then I’m just a country lawyer and I’m not as smart as these city fellers.

You can’t blame Sony/ATV given their options.  I’d have done the same.

The Artists, United, Can Never Be Defeated

November 29, 2012 Comments off

Yesterday on Capitol Hill did not quite go the way that the Internet Radio Fairness Coalition had in mind.  At all.  More about that will be written.  Mr. Chaffetz–more about him later, too–had asked Mr. Goodlatte for a hearing on the so-called Internet Radio Fairness Act, and a hearing he got.  I would say mostly a “listening” but that’s good, too.  The hearing was scheduled for 11:30 am and in a brilliant move, David Israelite of the NMPA scheduled a performance by five of our community’s top songwriters in an adjacent meeting room just prior to the IRFA hearing.

The writers were Lee Miller performing his song “You’re Gonna Miss This” (as recorded by Trace Adkins), Kara DioGuardi performing “Sober” (as recorded by Pink), BC Jean performing “If I Were a Boy” (as recorded by Beyoncé), Desmond Child performing his song “Livin’ on a Prayer” (as recorded by Bon Jovi), and Linda Perry performing her song “Beautiful” (as recorded by Christina Aguilera).

Of course there was a masterful political element to the timing and messaging of these songwriters, but first think about this–these writers performed their songs with a single instrument accompanying them.  Just one instrument and the voice, about the simplest instrumentation you can have.

And of course–the song.  These songwriters reminded the audience comprised of Members and staffers of the importance of the songwriter, and they did it by letting the songs speak for themselves.  By performing these songs–not with the vast instrumentation and production values of the recordings that interpreted the songs, they really and truly demonstrated conclusively that which every record company executive knows that is not a hype, not a self interested spin–it really and truly does all start with the song.

The combined Pandora earnings for these songwriters in the first quarter of this year was $587.39.  For over 33 million spins.

And Tim Westergren wants to pay them less.

It’s too bad that Tim wasn’t there for the sing along that Desmond Child led on the chorus of Living on a Prayer.  Since he used to play in a band and all, you would have thought that Tim would naturally gravitate to hanging out with his own kind.

I guess Tim was too busy to show up for a reminder of the investment that these writers are making in his company by giving him a break on royalty rates that all songwriters richly deserve.

When Pandora, and the NAB, and David Pakman and Google complain about royalty rates, remember that’s just about greed.  By handling themselves the way they have, all these people have demonstrated once and for all that they just don’t get it.

That’s OK, they are not our friends.  We don’t have to be friends with everyone we do business with.

But here’s the real deal: Without great songs there are no great records and without great records there is no Pandora.

And that’s the fact.

A Good Deal To Do: Pandora Doubles Down Against Creators, Now Strikes At Songwriters

November 6, 2012 5 comments

“You work hard, madame,” said a man near her.

“Yes,” answered Madame Defarge; “I have a good deal to do.”

“What do you make, madame?”

“Many things.”

A Tale of Two Cities by Charles Dickens

According to Bloomberg News, Pandora has opened a new front in its war on creators–now the $2 billion “music company” is suing songwriters represented by the American Society of Composers, Authors and Publishers.  And let’s be clear about exactly who the real defendants are in Pandora’s case.  Pandora and its venture capitalists and Wall Street underwriters may be suing ASCAP, but the people that Pandora is really suing are the songwriters whom ASCAP represents.

Why?  ASCAP is a voluntary association of songwriters in which songwriters pool their resources to grant blanket licenses and collect revenues.  So when you hear these inane statements like “Every Time A Phone Rings, ASCAP Won’t Get Its Wings” from faux copyright experts like the Amerikat, just remember–ASCAP is songwriters.  ASCAP is able to issue licenses because its members authorized it to do so.  The ASCAP board is elected by its members, not anointed like the Creative Commons board.  So when Pandora sues ASCAP it is really suing songwriters.

(And who wants to bet that Pandora’s lawyers (who also represent Google) will make more money off of suing ASCAP than Pandora will ever save in lower license fees even if Pandora is 100% successful? And ASCAP’s cost of litigating the rate court will have to be paid by ASCAP, making the ultimate royalty rate much lower even if ASCAP is 100% successful.  Boy have we seen that movie before.)

They Hate It When You Organize

If it wasn’t clear before, the Pandora lawsuit against ASCAP brings into sharp focus the purpose behind one part of the Internet Radio Fairness Act:  Section 5(a), which allows Pandora, Google, Clear Channel and their fellow travelers to sue any group of creators acting jointly to license their rights.  How can creators be sued by these gigantic companies?  Why under the laws designed to protect us from monopolists, of course.

You caught the irony there, right?  Google and Clear Channel are using Pandora as a stalking horse to sneak through laws that would allow monopolists to sue any group (however small) that got in their way, artists, labels or otherwise.

It will be a short step to get Chaffetz (RINO-UT) to broaden his bill to allow anti-monopoly suits against songwriters who get in the way as well.  So it should not be a surprise that Pandora is now suing ASCAP–Google’s own Madame Defarge has been down this path before, too.   One can just imagine her hissing at Tim Westergren over her knitting.

“Bravo!” said Defarge…”you are a good boy!”

As Tim Westergren told Ben Sisaro of the New York Times (speaking of IRFA), “This is not an argument about going out of business.”  That’s exactly right, it’s an argument about how to profit Pandora by extracting yet more money from songwriters and recording artists.  Pandora, Sirius XM, Clear Channel and many others you see, all enjoy a “compulsory” license for sound recordings under Section 114 of the US Copyright Act (a “114 license”), meaning that the government has taken away the right of recording artists to refuse to participate in Pandora’s offering.

Every license–even compulsory ones like the 114 license–have to have a royalty rate.  In the case of the 114 license, that royalty rate is set by the Copyright Royalty Judges, but has historically been negotiated privately and then submitted to the judges for approval.  At a very high level of generalization, that’s similar process to the rate negotiations in the ASCAP blanket licenses.

What’s interesting about the ASCAP blanket license is that while it is not a compulsory license,  the blanket license, in its own way, is a kind of government license.  This is because ASCAP operates under an antitrust consent decree and its rates are either negotiated, or, if you have particularly intractable people like Pandora and Google, it ends up in a “rate court.”  In ASCAP’s case, that is a federal judge sitting as the decider on whether the rate is fair.  (This particular judge recently ruled in favor of Google in the Viacom v. YouTube case only to be overturned on appeal.)

Google’s own Madame Defarge is no stranger to the rate court, so it should not be surprising that Pandora has thrown in its lot with Google with Mr. Chaffetz’s IRFA bill, and now is following the bloody footsteps of Madame Defarge in suing ASCAP songwriters in the rate court.

The one difference, of course, is that in order to protect companies who want to use the songs under ASCAP’s blanket license–say Google, for example–from the vicious monopolistic tendencies of songwriter groups–you know how they can be, these all powerful songwriters–the consent decree allows songwriters to “opt out” of the blanket license if they file certain paperwork.

One can’t help but notice that opting out of the blanket license for Pandora is the one thing that an artist/songwriter can do to keep Pandora from playing their records if that artist feels like Pandora is jacking them around.  On the one hand, the artist/songwriter cannot stop the use of the recording.  On the other hand, the songwriter/artist can opt out of any license granted by their PRO, which presumably would prevent Pandora from playing the recording.  Or Clear Channel, or Sirius XM.  (It’s likely that a songwriter could opt out of just the Pandora license if they wanted to.)

Alone, Powerless and Broke

These suits against songwriters and legislation against recording artists are the latest examples of the heavy handed approach of the new boss in the digital animal farm.  Definitely worse than the old boss.  Some commentators seem to think that the Chaffetz legislation is “good for the music business” because–and you can just hear it coming–a rising tide carries all boats.

If the Pandora lawsuit against songwriters tells you anything, it tells you that some boats are more equal than others and Pandora is throwing songwriters and artists over the side.  What these companies really want is for creators to be (or at least feel) alone, powerless and broke.

But you can just look on in shock and awe at the Pandora juggernaut.  They have a good deal to do.

For them.

If you want to voice your opinion on IRFA, Senator Ron Wyden has a comment page on his Senate website click here.

The Unelected: Lessig taking shots at artists again

February 8, 2012 Comments off

Once again, Lessig is trying to position himself both as a friend of artists and of copyright.  He is a friend of neither.

This came up in a recent speech in which Lessig takes a swipe at “artist representatives” as distinguished from “artists” who engage in a “fight” (his word) over those artists’ copyright (in the above video at 3:15 or so).  If you were unaware of Lessig’s contempt for CISAC and organizations like ASCAP, you would probably pass right over this reference.  But it is a telling one, and it would be well for artists and their representatives to understand in context, especially artist representatives like WIPO and the U.S. Trade Representative.

Let’s be clear about why artist representatives often take the heat for the people they work for–Metallica, Gene Simmons, Helienne Lindvall, Lily Allen, Mark Helprin, and most recently Suzanne Vega and Jay Maisel.  Or less famously, how were these artists treated by Grokster, Morpheus and Limewire to name just three? (Each of the three had some fairly direct connection to Lessig through the Electronic Frontier Foundation.)

How were these artists treated by the mob?  Was this kind of treatment designed to make more artists come forward and express their views, or was this wilding and the failed attempts of these “innovators” (aka “defendants”) in litigation more aptly a technique of those wishing to suppress speech?

Also consider the the bizarre examples of Germans residents having their houses egged when they opted out of German Street View and Jay Maisel, who had his home defaced by unknown bad guys when he asserted his rights against Andy Baio of the shadowy Expert Labs.

Is it any wonder that people like Lessig who come from a non-union background would be immediately critical of artists who prefer to have the protection of their elected union officials advocating their views to Congress, or elected songwriter representatives taking the public heat for criticizing Lessig and his Creative Commons?  Lessig couldn’t get elected dogcatcher, and he knows it–that’s why he dropped out of the election for a Congressional seat in–San Mateo.  (Which is right next door to…Moffett Field, home base to the jets of a certain rich Silicon Valley company, not mentioning any names but the initials are Google.)  Trust me: I really, really, really, really wish he would run for public office.  I was as disappointed as anyone that he dropped out–for different reasons than some, but disappointed nonetheless.

As Songwriters Guild of America President Rick Carnes (the elected leader of the SGA) puts it so well in the Huffington Post:

“One of the most frequently proposed ways of giving away your song is to license [actually quitclaim] the use of your song under a Creative Commons license. But let us examine the Creative Commons [Corporation] a little more closely…

Lawrence Lessig, the lawyer who suffered a bitter loss at the Supreme Court on behalf of Eric Eldred in arguing that the Sonny Bono Copyright Term Extension Act was unlawful, has made a career out of opposing the scope and length of copyright.  Exhibit A–Creative Commons [Corporation], is the organization he co-founded with…you guessed it, Eric Eldred, after losing [Eldred’s case] in the Supreme Court.

This is certainly their right, but realize that Creative Commons [Corporation] was born out of a defeated attempt to impose upon all creators Lessig’s and Eldred’s radical ideas about extreme limitations on copyright  which were resoundingly rejected 7-2 by the U.S. Supreme Court [for ‘stupid’ reasons according to Lessig].  So while Lessig denies that he is “anti-copyright”, it seems to me that he equivocates on what the definition of copyright is.  He’s not opposed to copyright, no, no.  He just wants the copyright term to be 14 years instead of life plus 70.  Sorry–when it’s my life that’s being added to the 70, I find someone who wants to cut the term of my copyright to 14 years to be advocating such a radical change that I consider him to be against copyright as the world defines it, therefore–anti-copyright.

It is this attempt to snatch victory from the jaws of defeat that spawned the Creative Commons license [actually a quitclaim].  The purpose of the license, I think fairly stated, is to promote the unpaid licensing of works of copyright.  Fine so far.  If a creator wants to give away their work, that is certainly their right.

But now Lessig tells us about the “hybrid economy” in his latest book “Remix”.  And what might the “hybrid economy” be?  “Where commercial entities leverage value from sharing economies.” Lessig cites Flickr, as an example to define this “hybrid economy.”   So doesn’t this mean that people who give their copyrights away as part of Lessig’s ‘hybrid economy’–through “sharing licenses”– can have their works exploited to profit commercial entities without compensation?  Maybe some of those same “commercial entities” that give millions of dollars to Creative Commons Corporation? Is that what is really going on here? After all, When Flickr was sold for 25 million dollars to Yahoo in 2005 how much of that money was shared with the people who ‘shared’ their content with Flickr?

The way I read the history, Creative Commons [Corporation] wasn’t founded by a bunch of songwriters getting together saying what we really need is a better way to give away our rights.  It was founded by Lessig following the Supreme Court’s rejection of his ideas about limiting copyright for everyone else.  Lessig proudly proclaims how he supported funding the Grokster litigation in favor of file share-style looting of music–another argument also unanimously rejected by the Supreme Court.”

Let’s be clear: Hybrid economist Google is one of Lessig’s biggest backers.  Google gave Creative Commons $1.5 million and persons related to Google gave hundreds of thousands more.  That is certainly the right of Google to give money to people who support their views and it is certainly the right of anyone to start an organization that attracts those contributions.

But if Lessig really is the friend of professional artists–something I simply do not believe–shouldn’t Lessig also be leading the charge to defend them against the mob?  Some might say, the mob that he created?

Or if that’s too much to ask, then maybe the more immediate step Lessig could take would be to defend artists against wilding–something like an “ethical nudge” as it’s known around the Edmond J. Safra Research Lab at Harvard.  Not just once in a footnote, but every time, defend them vocally and unequivocally.  And not just the amateur artists he often equivocates with professional artists, but all artists.  That would take real leadership, not throwing eggs in the dark of night or its online equivalent.  (Of course, distinguishing between professional and amateur artists is not to disparage either–we all start out as amateurs, but as we evolve into pro-am and professional status, our needs change.)

Until he has himself stood up and taken the heat from the mob when they are attacking professional artists, then he should also understand that many believe he lacks the bona fides to attack their elected representatives for doing so.  Ever since the Napster case, one of the PR strategies of “innovators” like Grokster, Morpheus and Limewire has been to savagely attack–or sound the dog whistle for others to attack–the artists involved.  However much I loathe that PR strategy, you could kind of understand it in the Metallica case because one band–one–was suing.  But after that, the genie was out of the bottle, and the “dark side” PR strategy really went to the very dark side and became directed against all professional artists–really any artist who asserted their Constitutional rights against the mob.

Maybe Lessig could win an election to the presidency of Creative Commons Corporation if the participating artists were given the right to vote in a supervised election.  (That would, of course, require identifying these artists, and you know how invasive that can be.)  I’m sure Google would be happy to pay for that election, too.  Why doesn’t he do something like that?  I wonder.

But it’s no wonder that the unelected Lessig takes shots at the representatives of professional artists.  Just like Google, he likes his artists alone, broke and powerless, all nicely trussed up for processing by the hybrid economy.

__________________
See also “Creative Commons: Because it sure seems to cost a lot of money to give things away for free

Creative Commons, the floating legal department for the global anti-copyright movement

%d bloggers like this: