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Mass NOI Charts: An Update from Royalty Claim

October 23, 2017 Comments off

An update on the state of the Copyright Office debacle also known as mass filing of “address unknown” notices under Section 115 (you can see the largely unusable posting of these notices at this link on the Copyright Office site).

Here’s some charts you won’t see in the trades or even on the Copyright Office site-Royalty Claim‘s Address “Unknown” Mass NOI chart that Royalty Claim measured by number of filings January 1-June 30, 2017:

[Preview] The State of Unclaimed Royalties and Music Licenses in the United States (3)

January 1-June 30 2017 by Number of Address Unknown Mass NOI Chart

And here’s another view by the millions of dollars of filing fees that Royalty Claim says has been paid to the Copyright Office (that is making a bundle out of the entire bureaucratic night sweat):

[Preview Fees] The State of Unclaimed Royalties and Music Licenses in the United States (4)

Mass NOI Fees Paid to Copyright Office Jan 1-June 30, 2017

Remember–the Copyright Office started allowing these filings in April 2016.  The inception to date totals are closing in on 50 million filings altogether–another chart the Copyright Office will never show you.

You can view the entire Royalty Claim presentation at this link.

Hey Alexa, Where’s My Money? Address Unknown Update Courtesy of Paperchain

July 17, 2017 1 comment

We get an update this week on the total “address unknown” mass NOIs filed with the Copyright Office for the royalty-free windfall loophole.  This time we have to thank our our friends at Paperchain in Sydney for doing the work of decompressing the massive numbers of unsearchable compressed files posted on the Copyright Office website.  As you can see, there’s been an increase of approximately 70% since January 2017.   (For background, see my article.)

As you can see, Amazon is still far and away the leader in this latest loophole designed to stiff songwriters, followed closely by Google.  However, Spotify is moving on up.  Spotify does get extra points for starting late in March 2017, but they are catching up fast filing over 5,000,000 as of last month.

To put this in context–the Copyright Office as recently as September 2015 posted these “address unknown” NOIs in a single searchable PDF.  However, the Copyright Office  apparently changed the practice abruptly in early 2016 once the Big Tech hammer came down.  Based on the last PDF I could find, the total number of “address unknown” NOIs filed with the copyright office from January 2010 to September 2015 was approximately 4,800.

NOI 2015 Era Date Detail

Compare that approximately 4,800 in five years to approximately 45 million in 18 months.

Notable in its absence:  Apple Music has not filed a single address unknown NOI.  Somehow Apple seems satisfied with their licensing practice based on an absence of a single NOI.

NOI Table
Licensee Paperchain 4/16-6/17
Total 45,856,225
Amazon Digital Services 23,977,548
Google, Inc. 10,386,238
Spotify 5,020,002
Microsoft 3,522,100
iHeart Communications 1,565,763
Pandora Media, Inc. 1,316,512
The Overflow.com Inc. 66,326

Big Tech’s Latest Artist Relations Debacle: Mass Filings of NOIs to Avoid Paying Statutory Royalties (Part 2) — Music Tech Solutions

September 30, 2016 Comments off

As noted in Part 1 of this post, Google, Amazon and others are filing what are reportedly “millions” of “address unknown” NOIs with the U.S. Copyright Office to avoid paying royalties on songs like “Fragile (Live” by Sting, even if they have licensed “Fragile” the album versions.  I fully expect that Pandora will eventually do the same for its on-demand service and Spotify is likely to do the same. This type of carpet bombing of NOIs takes the treatment of songwriters by online services to a new low.

via Big Tech’s Latest Artist Relations Debacle: Mass Filings of NOIs to Avoid Paying Statutory Royalties (Part 2) — Music Tech Solutions

Big Tech’s Latest Artist Relations Debacle: Mass Filings of NOIs to Avoid Paying Statutory Royalties (Part 1) — Music Tech Solutions

September 29, 2016 Comments off

Google, Amazon and MRI are reportedly filing “millions” of NOIs with the Copyright Office after buying data out the back door of the Library of Congress–all to avoid paying statutory royalties.  This takes “carpet bombing NOIs” to a whole new level of hurt for songwriters, and forces the Copyright Office to be complicit in the wholesale rip off.

via Big Tech’s Latest Artist Relations Debacle: Mass Filings of NOIs to Avoid Paying Statutory Royalties (Part 1) — Music Tech Solutions

The Voting Dead: White House memo questions if anonymous comments can be used in making policy?

May 25, 2016 Comments off

By Chris Castle

If you followed the Copyright Office request for public comments on the DMCA “notice and takedown” safe harbors, you will probably be aware of reports that a group called Fight for the Future generated 86,000 comments to the Copyright Office in approximately 36 hours.  I will give even money that it will turn out that investigation will reveal that most of those comments were fake.

One reason I’d make that bet is because they look fake.  Many were anonymous or pseudonymous and there’s really no way to know who or what submitted those comments.  And that’s why there’s a question about whether this kind of public comments can be used at all for policy making.

screen-shot-2016-05-12-at-2-58-04-pm

But another reason I’d make the bet is because we’ve seen this kind of thing before–and no one ever checks.

Recall that we were very suspicious of Industry Canada’s use of anonymous public submissions over the Internet in the public “consultation” on copyright reform in Canada held in 2009.  For mysterious reasons, Industry Canada bureaucrats charged with administering the consultation failed to implement even the most rudimentary controls to screen or qualify these anonymous public submissions.

Not only did the Industry Canada bureaucracy fail to implement even rudimentary controls over the public submissions, but they also completely overlooked obvious flaws in the submissions themselves—flaws easily exploited by “a dedicated group of like-minded people.”

Unfortunately, then-Minister of Industry Tony Clement was not given the information he needed to realize that his many public statements about the success of the consultation process will forever have an asterisk by them—“*except for the totally gamed online submissions.”

And then there was an incident in 2007 involving an EFF “petition” against the RIAA.  When you click on a “see signatures” link you are taken to a page full of 5 or 6 digit numbers all in columns and rows. What was this? There were literally a couple hundred number sequences, like little serial numbers, all arranged in neat columns and rows under the heading “Those Who’ve Taken a Stand Against the RIAA!” like you’re at the Tomb of the Unknown or something (no pun intended). It’s like you would have expected to see names, but instead you see numbers. And when you click on the numbers, the links point you back to the same page you were on when you clicked the link.

I tried clicking a few other numbers and the same thing happens. Then I finally happen to hit on one that actually shows a few names, names like “O. Online Poker”, “T. Texas Holdem”, “P. Poker Rooms”, towns like “Google, CA” (must be Stanford?), “Świnoujście, ME”, “f, MA”, “Beverly Hills, LA”, “Beverly Hills, MI”, Dubai, “SCOTLAND!!, AK”, and my personal favorite “J. Travolta, Los Angeles”. And then there’s “r. little boys” of “George, AL“. No comment.

We could take some advice from Google’s own advertising customers about fakery.  Sir Martin Sorrell, the head of the mega-ad agency WPP, says Google won’t even tell WPP or the advertisers themselves.  According to a recent article in the Financial Times, Sir Martin “warned Google that unless it improves its efforts to weed out ‘fake views’ of online adverts, marketers will shift their focus back towards traditional media such as press and television.” Sir Martin was reacting to a study that alleged that Google “has been charging marketers for YouTube ad views even when the video platform’s fraud-detection systems identify that a ‘viewer’ is a robot rather than a human being” and Sir Martin stated the obvious conclusion that “[c]lients are becoming wary and suspicious.”

It’s a short hop from fake views of online adverts to fake anything else, including fake signups to a public consultation on regulations.gov.

A process that allows an organization like Fight for the Future to collect submissions of a form letter and then submit them all at once unnecessarily inserts a gatekeeper into the public comment process.  But it is the kind of thing you would do if you wanted to avoid anyone collecting the address information on your favorite robots.

The anonymous and pseudonymous “signers” of the Fight for the Future form letter are not that different from a casual online poll.  As former Canadian Minister of Industry Clement learned the hard way, online polls or their equivalent do not make for good policy as that system is inherently unreliable.

I’m not the only one who thinks so.  Cass Sunstein, then the Administrator of the Obama Office of Management and Budget, issued a memo in 2010 to the heads of executive branch departments and regulatory agencies which dealt with the use of social media and web-based interactive technologies.  If the Copyright Office followed the memo’s proscriptions, it would likely rule out the use by the Copyright Office of online form letters such as the Fight for the Future webforms.

Specifically, the Sunstein memo warned that “[b]ecause, in general, the results of online rankings, ratings, and tagging (e.g., number of votes or top rank) are not statistically generalizable, they should not be used as the basis for policy or planning.”  Sunstein called for exercising caution with public consultations:

To engage the public, Federal agencies are expanding their use of social media and web- based interactive technologies. For example, agencies are increasingly using web-based technologies, such as blogs, wikis, and social networks, as a means of “publishing” solicitations for public comment and for conducting virtual public meetings.

As one source noted, “[A] million Americans can Digg or retweet [or Reddit] an important blog post, but government officials shouldn’t use that popularity as an indicator of the post’s value. That’s not always a bad thing considering that a dedicated group of like-minded people can game a casual voting system.”  Or the Copyright Office’s public comment process–and it must be said that since Regulations.gov hosted the online comment process, that would rule out any other form letter responses to any consultation for the whole of the federal government as hosted by regulations.gov.

And I think Sir Martin Sorrell would agree that there’s no more dedicated group of likeminded people that a bunch of robots.  So if you didn’t before, you get the idea about why Mr. Sunstein had reservations about using online petitions to make policy.

Mr. Sunstein—who some might call something of an Internet evangelist—is clearly trying to establish best practices for the U.S. government to allow the government to benefit from the good of using the Internet to further legitimate policy making goals while avoiding the bad. Avoiding the bad includes a prohibition on basing policy decisions on the use of information that is or could be gamed in the formation of public policy by “a dedicated group of like-minded people.”  And the gaming can be done before or after the fact, and the “like-minded people” can be outside—or inside—the government.

It is not a very large leap to imagine a truly Orwellian world where the government finds that the public supports its policies because it uses information that its anonymized supporters intentionally game or are encouraged to game to produce the desired result. As we noted in Fair Copyright Canada and 100,000 Voters Who Don’t Exist , the legitimate desire by governments to use the Internet to engage with the governed is to be admired. But if the process is selectively managed by bureaucrats with an agenda or groups like Fight for the Future (funded in part by mega-lobbyists the Consumer Electronics Association), it is to be greeted with considerable caution if not outright suspicion.

FFTF CEA

At least when they count the votes of the dead in Chicago, there was a somewhat real voter registration at some point.

The MTP Interview: Janita and #irespectmusic: Washington from an artist’s perspective

July 1, 2014 1 comment

[This interview first appeared in the June edition of Music Tech Policy Monthly.  Janita’s story was specifically noted by Representative Judy Chu in the House IP Subcommittee.]

The #irespect music team returned to Washington, DC last week for more meetings on Capitol Hill about artist pay for radio play.

We interviewed Janita about the trip and discussions with Members of Congress about the importance of passing legislation to create a performance right in sound recordings on terrestrial broadcast radio.

MTP:  Tell us a little about your creative arc, who are your musical influences, what’s your background and how did you get to where you are today musically speaking?

Janita:  I’ve been an artist for over 20 years; I was originally a child-star in my home country Finland. I have gone through many phases in those years, but the phase that I’m most excited about is the one that I’m going through right now. My musical style these days is a mixture of all of my influences, which include alternative artists like Radiohead and Blonde Redhead, soul artists like Meshell Ndegeocello and Bill Withers, and many artists that I find it harder to categorize like Tom Waits and Crosby, Stills and Nash. I’m an omnivore when it comes to music though. My favorite kind of music is great music.

I took a few detours in my musical career, having started at the tender age of 13. Being so young and pliable I got used to being maneuvered by record label executives and such, without realizing that their will wasn’t actually my will. It took me a long time to wake up, grow up and gather the courage to say: “No, man. I’m gonna do it my way. On my own terms.” Now I write all my own music, I play guitar and piano, and I’m very hands on in terms of production. I’m in charge of my music and my career and I love it! I think that that same defiance informs my current role in #irespectmusic.

nadler

L-R:  Tommy Merrill, Rep. Jerry Nadler, Blake Morgan, Janita

MTP:  What is your perspective on the lack of artist pay for radio play in the US?

Janita:  As a Finnish artist I have always been paid for my performances whenever my music has been played on the radio. I have gotten used to this right, and thus the absence of it is distinctly noticeable. In the beginning of my career I didn’t write my songs, so I relied on my performance royalties for part of my income. I would estimate that at times those royalties have been about a third of my overall income.

It was shocking to me initially, when upon moving to the States I heard that the US doesn’t pay performance royalty at all. But at the time I assumed that Finland was the exception in paying those royalties. It only dawned on me much later that instead the US is the exception in this particular area. Every other democratic country in the world pays this royalty. It’s a right, not a privilege.

MTP:  When you became a US citizen, did you continue to get paid for performances in Finland?

Janita:  I became a US citizen last summer, so this is all quite new. Royalties get paid retroactively, and up until some months ago I was still receiving payments for my performances on the radio from last year. I am lucky in that Finland allows dual citizenship with the US (for example Denmark, Japan and Netherlands don’t), which means that if I register my dual citizenship, I will not lose these royalties. However, if I was to decide to become solely a US citizen (which is what the US would actually prefer), I would lose my performance royalties from all over the world. The reverse of the American Dream! As it is, it doesn’t make sense for any recording artist from any democratic country in the world to become solely a U.S. citizen, for loss of a significant source of income.

marsha blackburn sm

L-R  Janita, Rep. Marsha Blackburn, Blake Morgan, Tommy Merrill

MTP:  How did you get involved with the #irespectmusic campaign?  Were you worried about getting the Lars Ulrich treatment?

Janita:  Blake Morgan is both the owner of, and a labelmate of mine on ECR Music Group. In addition to that he is the producer of my upcoming album. I followed the back and forth communication between Tim Westergren and Blake very closely last year, and I realized then that I could have been totally duped by that misleading IRFA-email that Westergren sent to a multitude of musicians. Learning the facts through Blake’s whistle-blowing roused my anger, and it was then that I realized that I wasn’t as informed as I wanted and needed to be about issues regarding my profession.

As the year went on, I started to get more and more passionate and involved in these issues. I was immediately on board with #irespectmusic when it launched. We as artists deal with so much injustice in the music industry, and often without our knowledge. I think that many of us are under the impression that there no longer is money in the music business, and settle into that reality. The truth is that there are billions of dollars changing hands in the music industry. It’s just that the artists aren’t getting their fair share of the pie. Us artists are making the industry’s only product and we’re not getting paid for it. It’s obvious that this has to change.

Regarding the Lars Ulrich-treatment… I didn’t much consider it. I was righteously, joyously angry and just went with it.

MTP:  You’ve been to Washington twice with Blake and Tommy to talk to Members of Congress and government officials about the #irespectmusic campaign.  What’s that experience been like for you?

Janita:  It’s been a transformative experience. The first time we went I actually felt emotional in the discussions. I realized that I was giving a face, a name and a voice to artists both in the US and abroad. These government officials regularly deal with the CEOs, directors and the lobbyists of large music organizations and companies. My guess is that it’s pretty rare for them to actually meet with middle-class rock stars: the people who are personally and directly affected by this particular legislation. We are the people to whom artists being paid for their performances on the radio means the difference between being able to keep our lights on or not. To me it’s both a responsibility and a privilege to tell my story to these people, now that I have the opportunity. It has been amazing to see how receptive, informed and motivated both the Members of Congress and other government officials have been.

 

copyright office

 Blake, Tommy and Janita with Associate Register of Copyrights

and General Counsel Jacqueline Charlesworth and Copyright Office Staff

 MTP:  Do you find your Washington meetings have been positive and are the government folks interested in what you have to say as an artist?

Janita:  Absolutely.   We have been greeted with much support everywhere we’ve gone so far. Blake Morgan is a brilliant and funny front-man for this campaign, and each meeting has been positive and inspiring.  Also, my story has been particularly interesting to the government folks that we’ve met, because it brings an international perspective to the issue. It’s pretty cool to state your case, when the injustice is so clear that only a fool would argue it. Artists deserve to get paid for their work! This is not a complicated issue in the end. A plumber, a farmer, a doctor and a lawyer get paid for their work. Why are artists expected to work for free? The government people that we have met with have all keenly understood this issue.

MTP: How have other artists you know reacted to the #irespectmusic campaign?  Have fans been supportive?

Janita:  This is #irespectmusic, with an emphasis on the “I.” It’s not about pushing others to act, it’s about personally reacting to the injustice and wanting to join the cause voluntarily. And so many have, which is wonderful. My fans are incredibly supportive, yes.

 

Judy Chu

L-R: Janita, Rep. Judy Chu, Blake Morgan and Tommy Merrill  

MTP:  What do you have planned in the future for #irespectmusic?

Janita:  I wouldn’t be surprised if we ended up going to Washington DC again quite soon. It’s been amazing to watch the momentum grow on the grassroots-level, on the political level and on the music industry side. Of course, right now we are waiting for Rep. Nadler’s upcoming bill, which is thrilling. Exciting plans are in the works!

IRM Team

“Successful” Licensing Models and the Opt Out: Music Licensing Study Comments

June 14, 2014 1 comment

The U.S. Copyright Office is conducting a “Music Licensing Study” as part of the government’s overall review of the U.S. copyright law with an eye to potentially overhauling the entire copyright system.  (See “The Next Great Copyright Act” by Maria Pallante, the head of the U.S. Copyright Office and the nominal go-to person for the U.S. Congress on copyright issues.)  The Copyright Office has received written public comments on questions posed in its Notice of Inquiry and is also holding public Roundtables in Nashville, Los Angeles and New York  (in that order).

The speakers at the Roundtables are by invitation only although the roundtables themselves are open to the public.  We understand that the Roundtable participants will be invited to submit written reply comments at some point after the conclusion of the last Roundtable.  The Nashville Roundtable is over and the Los Angeles Roundtable begins on Monday.

I filed comments with the Copyright Office and this post is the second of a three part post focusing on each of the three points I made in my comments (see Songwriter Liberty and Audit Rights Under Section 115).  This post proposes allowing songwriters to “opt out” of the compulsory mechanical license required under Section 115 of the Copyright Act.  While many are advocating abandoning the compulsory license altogether, I not only don’t think that goal is politically achievable without a consensus among songwriters as well as a very clear understanding of what comes after it, I also don’t think it’s necessary to go that far.

A middle ground is the “opt out,” so that those who wish to take advantage of some or all of the provisions of the compulsory license may do so, while those who want to negotiate a direct deal can reserve those rights to themselves.

One of the questions on the Copyright Office Roundtable Agenda is a discussion of successful licensing models.  I don’t see how anyone can defend the compulsory license in Section 115 as a “successful” model (particularly compared to the very successful compulsory license for sound recordings).  First, I can’t imagine how a licensing process could be “successful” if it does not result in transparency and robust record keeping. As I discussed in the post on creating an audit right, not only does the government not require transparency, the government actually mandates opacity.  I guess the only thing worse than piracy is accuracy.

In current practice, the compulsory license in Section 115 allows users of the license to blast out a paper trail of hundreds of thousands of notices of intent to use.  The practice of of “carpet bombing” NOIs simply results in an argument to insulate users from claims for at least intentional infringement–unless a songwriter can successfully argue the the entire exercise was just a ruse.  That would require a very well-funded songwriter plaintiff.  And no right to audit is just the cherry on top.

As David Lowery noted in his comment to the Copyright Office, the government forces songwriters to continue to license to users who don’t comply with the requirements of the license, may not pay on time, and may not pay correctly, even if the songwriter sends a termination notice and even sues the user.  The government has no feedback loop to determine if users of the license deserve to be able to keep using the government mandated compulsory.  (See Credit Check: Serial Bad Actors Should Lose Access to Compulsory Licenses.)  As David said:

In  an arm’s  length  direct  license,  I  certainly  would  not  choose  to  make a  new  license  for  my  songs  with someone  who  didn’t  respect  my  rights  or  honor  the  terms  of  my  agreement  in  the  past — particularly someone  who  owed  me  money.    Why  should  a  compulsory  license  be any  different?

These problems affect the big guys and the little guys alike–this is why I think it is necessary to allow songwriters (and if songwriters assign the opt out right, their publishers) to opt out of the entire charade.  Some may object to the opt out as making it more complicated for users to operate, but as we have seen with the Amazon service in the last week, it is not necessary for even a major service like Amazon to have deals in place with all publishers, particularly when the service offers onerous and subpar terms.

Here is part 2 of my filing:

2. Opting Out of the Compulsory License Under Section 115

A Nashville hit songwriter and session musician told me long ago that he was mystified. “Why can I get double scale when I play on the hits, but I can’t get double stat when I write the hits?” An excellent question.

Nearly 10 years ago, former Register of Copyright Marybeth Peters told the Congress that abandoning the compulsory may be an idea whose time has come:

[T]oday all…countries, except for the United States and Australia, have eliminated such compulsory licenses from their copyright laws. A fundamental principle of copyright is that the author should have the exclusive right to exploit the market for his work, except where this would conflict with the public interest. A compulsory license limits an author’s bargaining power. It deprives the author of determining with whom and on what terms he wishes to do business. In fact, the Register of Copyrights’ 1961 Report on the General Revision of the U.S. Copyright Law favored elimination of this compulsory license.  I believe that the time has come to again consider whether there is really a need for such a compulsory license. Since most of the world functions without such a license, why should one be needed in the United States?

If the Congress were to abandon the compulsory license, this would potentially derail over 100 years of commerce that relies on that structure. I think that ultimately this is the direction that the Congress should steer. However, short of abandoning the compulsory license altogether there is a middle ground and potential fix that would be relatively easy (emphasis on “relatively”).

Why keep Section 115? Just as we have uniform statutes like the Uniform Partnership Act or Uniform Commercial Code, there is a value to having certain terms of a mechanical license set in the Copyright Act. The standard negotiated mechanical license is a private contract that typically starts with “this license incorporates by reference the mechanical license in the Copyright Act except as set forth herein” or words of similar import.

The problem is not that there is a uniform set of mechanical license terms that copyright licensees and licensors can easily reference. The problem is that the terms are compulsory and essentially deny songwriters the ability to bargain—as my Nashville friend bemoaned. This is especially true of the so-called “minimum” statutory rate. I respectfully suggest that in practice the “minimum” rate is essentially a maximum primarily because the songwriter lacks the ability to opt out and withhold their song from the market. Why would any licensee ever pay more than the “minimum” if they are not compelled to accept a higher rate?

This is yet another problem plaguing songwriters. One fix would be to establish a decision point that would allow songwriters either to opt in to the existing statutory license terms or to opt out of it. My view is that the better route might be to phase in an “opt out” so the newly free market could develop more gradually, and implement the “opt in” a few years after the market got used to the idea of the “opt out.”

Either way, the change would probably best be implemented prospectively–there are a host of statutory licenses in use, either stand alone or private agreements granted by artist-songwriters in record deals that rely on the statutory license. Simply eliminating these existing licenses entirely would likely be extraordinarily disruptive and maintaining an optional “uniform mechanical license” in the Copyright Act seems to make good commercial sense.

How would this “opt out” procedure work as a practical matter? A songwriter could communicate her decision to opt out of the statutory license in the document repository of the Copyright Office.

As you know, the U.S. Copyright Office has a well-developed document repository that has been in place for decades. For a modest fee, anyone can register a document and “to encourage document recordation, the law confers certain legal advantages, including priority between conflicting transfers and “constructive notice”…if certain requirements are met.”

So an “opt out” notice could easily be recorded in the Copyright Office and take advantage of the existing jurisprudence around document recording. The services that often “carpet bomb” notifications of intention to use under Section 115 could just as easily look up the songwriter or work in the Copyright Office recordation database to determine if the particular work is available for compulsory licensing and act accordingly.

The “opt out” notice could be very simple in language and structure and its format could be established by equally simple statutory language. Songwriters could assign these rights to their publishers or administrators.

While the U.S. may eventually abandon compulsory licensing altogether as Register Peters suggested a decade ago, a serviceable repair to the system may be an “opt out” structure. This would allow songwriters who were satisfied with the status quo to continue with the compulsory and those who were not could recover their bargaining rights. In the absence of a recorded “opt out” notice, a service or record company could rely on the compulsory license and rate.

If the goal of the statutory license is to approximate a market rate, an “opt out” system will provide many good data points for a rate setting proceeding.

I respectfully suggest that under this structure, there would not be a gap in rights, songwriters and publishers would be able to bargain freely and the market would produce sufficient information for licensees to know what rights were available and who to pay.

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