Posts Tagged ‘internet radio fairness coalition’

A Great Question from @ZoeCello: Should Digital Retailers Own the Artist’s Fan Data?

November 19, 2012 Comments off

I want my data and in 2012 I see absolutely no reason why I shouldn’t own it. It seems like everyone has it, and exploits it…everyone but the creators providing the content that services are built on. I wish I could make this demand: stream my music, but in exchange give me my listener data. But the law doesn’t give me that power. The law only demands I be paid in money, which at this point in my career is not as valuable as information. I’d rather be paid in data.

Zoë Keating, What I Want From Internet Radio

Zoë Keating has raised a number of interesting points in a recent blog post about digital music services and one of them caught my eye–why is it that artists can’t get in the loop with the fans who buy or listen to their music?  When artists spend significant amounts of time and money trying to drive fans to purchase from iTunes or listen to their music on Pandora, Spotify or YouTube, why can’t these same artists connect with their fans who happen upon a track on a digital retailer?  (I may use “digital retailer” generically to include streaming services even though strictly speaking there’s no actual object being “retailed.”)

Or said from the point of view of property rights, why should the digital retailer own (or own exclusively) the artist’s property right in data relating to their works?  Since it is data created by the sale or transmission of the artist’s work for which the artist has spent time and effort to make valuable, why should that value accrue soley to the digital retailer?

As Zoë Keating says: “I want my data and in 2012 I see absolutely no reason why I shouldn’t own it. It seems like everyone has it, and exploits it…everyone but the creators providing the content that services are built on.”  That’s my emphasis, but I think that she sums up the problem very concisely.  (There’s a lot more to her post that you should read, but I’m going to focus on this one issue.)

The Land Grab for Fan Data

The main reason, of course, is that the digital retailer doesn’t want to share that information with anyone because it’s valuable.  I’m not talking about getting information about how many people in zip code 90210 bought your track.  I mean who bought it.

The retailer will no doubt say that simply handing over this information without the consent of the consumer would violate various privacy laws.  Yes, that’s probably true and also a very convenient dodge.  What I do not think would violate privacy laws would be if the retailer offered the fan a meaningful chance to sign up for the artist’s mailing list at the point of purchase or at the time of listening.

For example, if you are listening to Zoë Keating on Pandora, you are taken to a page that says “Frozen Angels” from “One Cello X 16: Natoma”.  You can “Share” or “Buy”.   If you click on the album page it’s similar stuff.

Same record on iTunes, you get “Artist Quick Links” which is all Apple-facing stuff:  “copy link” means the iTunes link, alerts are for iTunes, tell a friend let’s you send a link to iTunes, and so on.  And of course, you can share it on Facebook or share it on Twitter.

This is not just the template for an indie artist–the current AC/DC catalog promotion is essentially identical.

So why is this the case?

Sharing is Caring

What is so difficult about having another button–one that said “Artist Website” or “Artist Fan List” and either put a link to the artist website (which could be part of the track metadata) or a link to a signup for the artist’s mailing list.

The point of this, by the way, is for the artist to be able to capture the benefit of some of the traffic that they drive to Pandora, YouTube or to iTunes.  Sure, these big services can look down their noses at the indie artist, but how difficult would it be to implement?  They should welcome the opportunity to support the artists whose work profits them–particularly Spotify who pays jack in royalties and YouTube who spends as much time finding ways to screw artists as they do creating impossibly screwy royalty systems also designed to screw artists in ways that no old boss ever had the brass to attempt.

So we are not talking about a link to something that would drive traffic back to the retailer, or find another way to keep the artist’s fan on the Amazon site.  If you don’t like Zoë Keating, how about a nice salami sandwich?  Would you like fries with that?

No–having these sign up buttons would not be spamming the fan and would truly be sharing at least the most important data about the fan for the artist.  How to stay in touch.

I really don’t see the harm in this and I see tremendous benefit in affording artist and fan a chance to connect.  All at the fan’s choice.  Indie artists have a hard time getting any leverage over these retailers to negotiate better terms.  If we stick together, maybe one of them will do the right thing.

Since Pandora is asking for ever greater financial concessions from artists, maybe artists could ask Pandora for a non-monetary benefit of great value to the artist.  It would be help Pandora restore their tarnished image if they took the first step down this path.

If you agree, you can Tweet them @pandora_radio.

Big Tech’s Inverted “Bump”: When demand goes up, royalties go down

November 8, 2012 Comments off

Greg Sandoval has an interesting article today (“Web Radio Growing Faster Than On-Demand Services“) that points out another clear example that the new boss is worse than the old boss.

It has been a time-honored tradition in record deals (and many other types of creator contracts) that if your record has success, your royalty rate increases incrementally.  These are called “bumps.”  For example, a 16% artist royalty would increase to 17% at 500,000 and then to 18% at 1 million.  (Of course in contemporary record deals, those sales bumps would be much lower, closer to 100,000 and 250,000–in fact, as low as you can get them.  While the principle of reward for good performance is the same, the thresholds are much lower.  Why might that be do you suppose?)

Pandora, Google, Sirius, Clear Channel and their Big Tech and Big Media pals are proposing a different approach–the inverse bump.  If you are popular, your rates will go down.

Is this why Tim Westergren drones on about the “middle class artist”?  Because he doesn’t want you to be too successful?

Think about this when Pandora gets done with their ASCAP lawsuit against songwriters.  That ASCAP check?  Great news, you were successful on Pandora, so they cut your royalties.

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

The Tide Has Risen: Five Simple Facts About the “Internet Radio Fairness Act”

October 28, 2012 1 comment

Big Tech and Big Media have joined forces in the “Internet Radio Fairness Coalition” which includes Clear Channel Media and Entertainment, Computer and Communications Industry Association (Google), Consumer Electronics Association (Google), Digital Media Association (Google) and…Pandora.

So you see, the way this works is the group put Tim Westergren out with the long face and the sad eyes to talk about how Pandora was having such a hard time and that artists and fans just had to support Internet radio and his $1 million a month or so in stock sales from his company with (what was then) a $2 billion valuation.  Oh,no sorry–just support Internet radio because Tim used to be in a band.  Once Tim began to realize that just like his days in a band, objects in the rear view mirror were smaller than they appear, guess who jumps out from behind the curtain?

The Great Oz–Google and Clear Channel.

And so much for Pandora’s commitment to independent artists–Did Clear Channel ever make good on their indie radio promise out of the last payola investigation?  And what’s the threat if you disagree with them?  Same one it always is with Big Media–if you get in the way, you won’t get played.

So let’s be clear–it’s not about “Internet Radio”, the Internet or Fairness.  It’s about money, power and lobbying, although I guess you could say it’s an act.  But it’s not just about the rates paid to artists–if that’s all it were about, then there would be no need for the court packing and chilling effects in the bill.  What court packing and chilling effects, you say?  You’d never know that stuff was in the bill if you just listened to Tim Westergren or read the pro-IRFA press releases.

The Tide Has Risen and Pandora is Throwing You Overboard

Here’s five reasons why artists should be very concerned about the “Internet Radio Fairness Act”:

1.  Reverse Payola to Monopolies for “Music Discovery”: The Internet Radio Fairness Coalition is backed by some of the biggest monopolies in the world: Google and Clear Channel–it’s Big Tech and Big Media combined.  Is it reverse payola?  If you make us pay you more money, we won’t play your records?

Remember all the good things Clear Channel was supposed to do after they got slammed for payola in 2007?  What did they actually do?  Clear Channel tried to get artists to waive both their songwriter’s performance royalties and their artist royalty collected by SoundExchange–in other words, the same direct licensing that artists now oppose.

[Following Clear Channel’s recent settlement of a payola investigation with the FCC, Clear Channel (and other broadcasters) agreed to air 4,200 hours of indie music.  The Future of Music Coalition commented at the time:]

Clear Channel is giving indie artists a raw deal by forcing them to give up performance royalties as a condition of getting airplay on its hundreds of stations. Remember, as a condition of its settlement with the FCC over payola allegations, Clear Channel and other broadcasters were required to play 4,200 hours of local and indie music. It’s replacing one form of a payola with another.

Sneaky. Greedy. Egregious. Any number of pejoratives could be used to describe the move, but it is especially troubling because digital performance royalties are becoming an ever more important source of revenue for artists as technological changes drive the way music is delivered….This is a company that is not — and has never been — on the side of artists.

[According to FOMC’s former executive director,] “’The fact that Clear Channel would require artists to waive royalties to get consideration for airplay clearly shows they’ve learned little from the payola scandal of the last couple years,’ said Jenny Toomey, executive director of the Future of Music Coalition. ‘Clear Channel is playing the same old tune.’”

2.  Pandora Wants to Legislate Profits on the Backs of Artists:  Now that Pandora has a $2 billion valuation, the simple truth is that Pandora is trying to legislate its profits on the backs of artists and so does Google and Sirius XM–a company that has $1.5 billion in cash on their balance sheet.   This is just about money, it’s not about music.

But for musicians, the salary remains the same.

3.  Look Musicians in the Eye and Explain Trickle Down Innovation:  Musicians gave Pandora and Sirius a discount on royalties in 2009–and helped save their businesses.  Pandora and Sirius have billions dollar valuations today and their executives–including Tim Westergren–are millionaires.  Obviously, Google and Clear Channel also have multibillion dollar valuations.

So now these companies have joined together to tell artists, musicians and vocalists that a rising tide carries all boats and that the benefits from making Big Tech and Big Media richer still will trickle down to creators.

The tide has already risen.  Not only has it not carried all the boats, the Internet Radio Fairness Coalition want to throw creators overboard.

4.  IRFA is Censorship Hiding Behind Fairness:  IRFA allows monopolists like Clear Channel, Google and Sirius to threaten any artist organization with an antitrust law lawsuit if the artists “impede” Big Media’s lust for direct licensing.

Yes–you read that right.  Monopolists threatening an antitrust lawsuit against artists who organize.  Go straight to jail, do not pass go, do not collect your $200.  Using this government mandated gag rule, Clear Channel could have tried to silence that statement about them from the Future of Music Coalition’s Jenny Toomey.  Coalition, get it?  Or the Recording Artist Coalition, or any one of a number of artist advocacy groups.

What Clear Channel and Sirius really want is artist-by-artist direct deals to pick off artists one-by-one.   Google has already demonstrated a desire for the same treatment with the Authors Guild.

Google attorney Daralyn Durie told Judge Denny Chin [the presiding judge in the Google Books case] in federal court in Manhattan that [millions of] 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. (emphasis mine)

Did Tim Westergren tell you about this part?   Does the “Internet Radio Fairness Coalition”?

Nope.  Read the bill, it’s right there under Section 5(a): “Limitation of antitrust exemptions”.

And if there’s no intent to chill artists, then why doesn’t Tim Westergren say so since he so identifies with being in a band?

5.  Payback is a Bear:  IFRA Guts the Copyright Royalty Judges:   Big Tech and Big Media want the Congress to get rid of the Copyright Royalty Judges who set the rates for Internet radio.  That’s right–they want the Congress to fire the current judges and replace them with political appointees.  Read the bill–Section 6 “Proceedings of the Copyright Royalty Judges and judicial review”.

This is simply payback for the current judges having the temerity to refuse to bow to the money.  It’s called “court packing”.  Get rid of judges you don’t like and replace them with judges you can control.

Not only that–notice the other part of that titles: “and judicial review”.  Big Tech even wants to control what previous rulings the new judges can take into account as precedent in later rulings.  That means their judges start with a clean slate and can do whatever they like.  He who doesn’t like history drools over erasing it.

Tim Westergren isn’t talking about this either.

And by the way–don’t let them tell you that somehow the judges are in the pocket of “Hollywood” (whoever that is)–all the current rates were highly negotiated by some of the very people who are complaining of them now.

Remember, Westergren declared “the royalty crisis is over!” in July of 2009.  Barely 3 years later they’re back?

And now they want scorched earth.

The tide has risen and artists need to keep their heads above water.   If Google, Clear Channel and Pandora haven’t made that an antitrust violation.

Google and Clear Channel Send Their Shills Out for IRFA Lobby Fest

October 25, 2012 Comments off

So we were wondering how long this would take, and it took no time at all.  Not only do you have Pandora’s Tim Westergren shilling for Clear Channel, you now have Google shills the Computer and Communications Industry Association (funders of several bizarre “studies”), the Digital Media Association and the Consumer Electronics Association, all coming to the party.

Yes, all these wankers have come together in the “Internet Radio Fairness Coalition” and why?  According to their press release, “Internet Radio Fairness Coalition Launches to Help Accelerate Growth and Innovation in Internet Radio To Benefit Artists, Consumers and the Recording Industry“.

Ah, of course.  Trickle down innovation, led by Mr. Million a Month, Tim Westergren.  Well–after what Pandora’s stock did today (trading was halted), not so much.  Tim probably won’t be clearing $1 million a month if that keeps up, bless his heart.

Let’s be clear about something:  Google hates the music business.  The Computer and Communications Industry Association hates the music business.  The Consumer Electronics Association hates the music business–especially the head of the CEA, Gary Shapiro who really loathes the music business.

And let’s also be clear about something else:  Tim Westergren is not your friend.  Maybe he was once, but he has sold his soul, he has picked his side and he is taking his stand.  And it’s not with you.

Westergren is with The Man 2.0 and on the side of the money.  And they want to take your money.

So heads up artists:  The fight is on.  All these people intend to make sure you are screwed, blued and tattooed if you let them. They are out to eat your lunch.  This is not a dog whistle, it is a battle cry.  They mean to run us over.

If you let them. Who will stand up to them?  And as the man said, if not now, then when?  If not here, then where?  If not us, then who?  Our cause is just and the time is now.

Who will take a stand?

Betting the Company: The Internet Radio Fairness Act has little to do with the Internet, Radio or Fairness

October 18, 2012 Comments off

An interesting exchange with a reporter about the Internet Radio Fairness Act:  He denied that IRFA created a new set of per se violations of the Sherman Act–the principal U.S. antitrust law–for sound recording owners who collectively engage in “impeding” the efforts of anyone (including Sirius XM and Clear Channel) who seek direct licenses with sound recording owners.

Apparently, no one is writing about this section, so it can’t be there.

You know a good way to find out about IRFA is to read the bill, not read what journalists are saying about the bill.  IRFA is not very long and packs a lot of damage into a few words.

Why might the IRFA drafters (hiding behind Pandora’s Tim Westergren) be interested in chilling the speech of those who dare object to them?  And who might those drafters be?

Congress Giveth What the Judges Take Away

Understanding the Sherman Act reference is where a page of history is worth a volume of logic.  This story from Billboard sums it up:

SiriusXM has filed a lawsuit against SoundExchange and A2IM.  The company  alleges that the two organizations violated Section 1 of the Sherman Act and  acted in concert with other organizations to interfere with the satellite’s  channel efforts to obtain cheaper direct licenses that pay royalty rates of 5% to 7% instead of the 8% statutory rate for master rights owners.

In alleging that SoundExchange and A2IM are engaged in antitrust behavior that is causing the satellite operator  economic harm,  SiriusXM is asking the court to enjoin the two organization’s from  interfering in its direct licensing  efforts, and pay its legal fee and  whatever economic damages the court determines SiriusXM has suffered.

The most significant redress it asks for, in terms of potential impact upon the U.S. music industry, is for SoundExchange to be  dissolved and unwound on an orderly basis, or alternatively appoint an  independent monitor to oversee SoundExchange’s compliance with the antitrust  laws for a period of 10 years.

Last summer, SiriusXM made a  deal with [Music Reports, Inc., or] MRI to try and obtain direct licenses with record labels, but were  rebuffed by all four majors and most independent labels with only 80 signing on.

…SiriusXM alleges that the organization’s launched “a coordinated  attack” of its direct license initiative, orchestrated by SoundExchange. In addition to SoundExchange, the National Academy of Recording Arts and  Sciences, the American Federation of Television and Radio Artists, and the American Federation of Musicians all allegedly reached out to  their  memberships in a communication designed to achieve a collective refusal to Sirius direct licensing program. (emphasis mine)

Now compare Section 5(a)(1)(B) of IRFA:

Section 112(e)(2) of title 17, United States Code, is amended—…(B) by adding at the end the following: “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).”.

So–it looks like the Internet Radio Fairness Act is designed enact into law the plaintiff’s claims in the Sirius XM lawsuit.  I would suggest to you that the real purpose of IRFA is not so much “rate parity” but to chill the future speech of the types of entities that were defendants in the Sirius XM lawsuit.

It’s better PR for Sirius to sue labels and SoundExchange than it would be for Sirius to sue unions (who have an anti-trust exemption anyway).  Why is it still better PR for Sirius to go to the Congress to pass a law that would not only give them a win in their litigation, but hand them the cudgel of threatening potential criminal penalties for any collective having the audacity to hope to represent or advise their members. Next thing you know Sirius will want to pay artists in scrip at the company store.

Seems to me that sounds a lot like–censorship.  Violations of free expression and freedom of association.  Other unconstitutional things.

But to hear the press reporting on Tim Westergren’s defense of IRFA, you would think that it was all about rate parity.  I guess some animals are just more equal than others.

What’s the Issue with Direct Licensing?

Why is it worth it for Sirius XM to get such a black eye for their direct licensing campaign?  The Future of Music Coalition sums it up:

In plain language, SiriusXM and MRI [Music Reports, Inc.] are proposing to have all the money flow through the record label, instead of paying performers their share directly. FMC knows and loves many record label people, but history has demonstrated that these passthroughs are subject to money being diverted to pay for album costs, or lack the same level of transparency that’s available to artists when receiving a check directly from SoundExchange. Having heard many stories about clever accounting practices in which even successful artists never “recoup,” we worry about whether performers will recieve their share of a growing revenue stream.

Then there’s this. Billboard reports:

The question arises if the labels will pay the artist half the royalty, or 50 percent, they receive for each time a song is played, or will some labels choose to pay them their artists the regular royalty rate, which typically ranges between 15 percent and 20 percent.

Yep. There’s also a chance that, under this direct licensing arrangement, performers would see their royalty rates reduced.

So you would think that the major labels and indie labels would be leading the charge to increase direct licensing, right?  Wrong.

It sems pretty clear that the reason that Sirius XM was having trouble with their direct licensing campaign was that it was bad for artists–and SoundExchange and the unions gave their members the other side of the story.  That lawful speech so infuriated Sirius XM that they sued and having stumbled in that lawsuit, they are now trying to get the Congress to make it a violation of the antitrust laws for unions to give their members the other side of the story.

And the way I read IRFA, it could be applied against the Future of Music Coalition posting the quoted language, too.

They just hate it when you organize.

The MRI/Royalty Logic Issue With SoundExchange

When you read the history of these issues, Music Reports is a frequent participant and apparently is actively involved in negotiations of regulations and other issues regarding the administration of the Copyright Act.

I think it is fair to say that Music Reports (or MRI) has in part made a business of working for digital services who rely on compulsory licenses to license songs.  MRI is known for sending thousands of notices to copyright owners (most recently for the Amazon cloud service).  Note that however commercially impracticable this process (known as “carpet bombing NOIs” in some circles), it is lawful.  Although MRI is also known for sending checks for $0.01 to some publishers, they also report signficant payments.  Like Rightsflow and other companies in the administration space, MRI collects significant data about music publishers and sound recording owners.

It is this “back room” operation that MRI operates that may be why they were singled out in the Future of Music post quoted above.

MRI also operates (or operated) a company called Royalty Logic which struggled to become a competitor to SoundExchange until 2007.  When it comes to understanding that connection regarding SoundExchange, it may be helpful to understand what happened to Royalty Logic’s bid to become a SoundExhange competitor.

According to Billboard’s March 8, 2007 story by Susan Butler:

The Copyright Royalty Board (CRB) formally made SoundExchange the sole  “collective” to handle compulsory performance royalties for sound recording  owners and performers. The CRB officially adopted a single-collective system to  collect and distribute royalties paid by webcasters and Internet  simulcasters.

Near the end of its 115-page  decision setting webcasting royalty rates released earlier this week (March 6),  the CRB addressed a request by Royalty Logic. The for-profit company, a  subsidiary of Music Reports, wanted to become a “designated agent” to receive  and distribute royalties under the compulsory license scheme. The Copyright  Royalty Judges not only denied the request, but they made it clear why  SoundExchange is – and should be – the one and only collective….

The judges wrote that there is a “fundamental misperception” by Royalty Logic  and, to a lesser extent, by SoundExchange regarding [a statutory requirement of a two-tiered system of royalty collection and payment]. The entire structure is a “legal fiction,” they wrote, and the judges  are under no obligation to preserve it.

Declining to adopt the two-tiered agent system, the CRB adopted a system for
a single “collective,” i.e., an organization that would both  collect and distribute compulsory royalties under section 114 of the Copyright  Act. Every service using the compulsory license must pay royalties to this  collective for all copyright owners.

“It  represents the most economically and administratively efficient system for  collecting royalties under the blanket license framework created by the  statutory licenses,” the judges wrote.

In  concluding a five-page comparison of SoundExchange to Royalty Logic, the
CRB expressed “serious reservations” about Royalty Logic. The  judges concluded that SoundExchange “will best serve the interests of all  copyright owners and performers” whose works are subject to the statutory  licenses.

Given this history, not only the censorship provisions of IRFA but other provisions of IRFA that require gutting the current system of Copyright Royalty Judges (i.e., essentially the Copyright Royalty Board that ruled against Royalty Logic) may start to make more sense.  And don’t forget the Sirius XM lawsuit against SoundExchange and A2IM asked to have SoundExchange dissolved.  I wonder who thought of that.  And what might replace SoundExchange were it to be dissolved?

Betting the Company: Little to Do with the Internet, Radio or Fairness

So you can see that at the end of the day, IRFA has a lot of other moving parts that I think are really bad for creators, and certainly seem quite burdensome to speech–possibly unconstitutionally burdensome.  When you add to the mix that Clear Channel is also engaged in a program of direct licensing, it should at least become more apparent why the National Association of Broadcasters is reportedly in the mix supporting IRFA (Clear Channel is a member and NAB board member).

So IRFA clearly ain’t just about the rates that Pandora pays.  IRFA seems to me to be as much about going to Congress to settle old scores as it does the Internet, radio or fairness.  And in my view, Tim Westergren is making a big mistake in betting the company to defend the entire package.

If you want to take action, send a letter to Congress courtesy of the American Federation of Musicians.

“Crying To Congress Will Not Save Pandora’s Investors”

October 12, 2012 Comments off

An excellent post by Stephen Faulkner on Saving Alpha:

The writing is on the wall here. Pandora is crying to congress for help because they can’t turn a profit by giving away content to users for free with limited exposure to advertising, and because they can’t get enough paying subscribers from their extensive base of “free” listeners. If I were an investor, I’d sell immediately just like the insiders have been doing en masse, or at the very least I would demand some real answers from Tim Westergren on why he can’t make this business model “work.” Pandora is a nice little service for some free music, but it’s a terrible business and one which investors should stay away from.

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