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@philouza: New Bill Calling For Transparency In Music Is Surprisingly Opaque — Artist Rights Watch

August 2, 2017 Leave a comment

NPR’s Andrew Flanagan on the controversial Transparency in Music Licensing and Ownership Act (TIMLAOA).

via @philouza: New Bill Calling For Transparency In Music Is Surprisingly Opaque — Artist Rights Watch

Controversial Bill On Music Licensing Has Nothing to Do with Small Business

August 1, 2017 Leave a comment

I dreamed up a startling new technique to attempt to divine whether the true purpose of the controversial Transparency in Music Licensing and Ownership Act (or…”TIMLOA”?)  was intended to protect small business as advertised by the MIC Coalition.  I determined that the safe harbors  in the Transparency in Music Licensing and Ownership Act (or as it’s been called, The Shiv Act) was actually designed to protect the biggest of big business.

What startling new technique did I utilize?  I read the bill.

What you don’t find in the bill is anything that limits its application to small business.  Is it common in music licensing legislation to find such protections?  Absolutely.   This wasn’t what I expected to find given the braying of the Disco Ducks.  But then you know what they say…

The Fair Play Fair Pay Act, for example, has special protection in great specificity for small business like noncommercial broadcasters, public broadcasters and small broadcasters.

The Performance Rights Act (from the 110th Congress) also had very clear exemptions for small broadcasters.

While as a matter of propaganda it ignores these protections, the Local Radio Freedom Act (aka “The Pay Your Rent With Exposure Bucks Act”) is very clear about protecting a particular class of broadcasters: “local radio.”

Exposure Bucks

Yet none of this protective language appears in the Transparency in Music Licensing and Ownership Act.  Why doesn’t the TIMLOA have such limiting language if it’s actually all about protecting small business?  Maybe because it’s not about small business at all?  Maybe it’s about these guys in the MIC Coalition:

mic-coaltion-8-15

Realize some MIC Coalition members are themselves trade associations for companies with combined market capitalizations over $1 trillion.  When you see logos for Digital Media Association, the CEA (now called the Consumer Technology Association) and the Computer and Communications Industry Association (home of the Disco Ducks) these are themselves made up of massive companies like Apple, Amazon, YouTube and of course Google, not to mention Spotify.  True small business can’t afford these lobbyists and PR firms (like the Glen Echo Group) this starts to look like the astroturf plant it really is.

So don’t let them tell you that the Transparency in Music Licensing and Ownership Act  is about small business, unless the MIC Coalition would like to include the kind of protective language in their bill that our business has always included to protect the real small business.

 

Don’t Believe the Astroturf: Yet More Regulations Won’t Help Songwriters or Small Business — Music Tech Solutions

By Chris Castle

“[Government] interference is but the first link of a long chain of repetitions, every subsequent interference being naturally produced by the effects of the preceding.” James Madison, The Federalist Papers No. 44

There is a bill in Congress backed by the mega lobbying juggernaut called the MIC Coalition that would force songwriters and artists to “register” with the government in order to protect their rights from the biggest corporations in the world. Failing to do so would take away the stick of statutory damages and an award of attorneys fees to songwriters or artists who are victorious in copyright infringement litigation. Statutory damages and attorneys’ fees are the only real protection that the government gives these creators–the smallest of small businesses.

via Don’t Believe the Astroturf: Yet More Regulations Won’t Help Songwriters or Small Business — Music Tech Solutions

The Transparency in Music Licensing and Ownership Act: The Domesday Book Meets A Unicorn — Music Tech Solutions

July 27, 2017 Comments off

Americans are freedom loving people and nothing says freedom like getting away with it.

Long Long Time, written by Guy Forsyth

Longtime PRO opponent Rep. Sensenbrenner introduced a bill entitled “The Transparency in Music Licensing and Ownership Act“, a piece of work that is Dickensian in its cruelty, bringing a whole new meaning to either “newspeak” or “draconian,” take your pick.  It’s rare that the Congress can accomplish the hat trick of an interference with private contracts, an unconstitutional taking and an international trade treaty violation all in one bill.  But I guess practice makes perfect.  And since the MIC Coalition gave the bill a rousing cheer followed by a heaping serving of astroturf, we should not be surprised.  (Read the bill here.)

While this legislation currently applies only to songs and sound recordings, other creators should not feel that they’ve dodged a bullet.  I hear that the House Judiciary Committee staff is planning on closing the loop and making all copyright categories subject to the same “register or lose it” approach favored by Lessig, Samuelson and their fellow travelers.  If you thought that we are in an era of the triumph of property rights, that must be a different Congress you’re thinking of.

The bill perpetuates the myth of the “global rights database” that no one who understands the complexities believes will ever be created.  It sounds logical, right?  We have county recorders for real estate, the DMV for cars, why not a database for music?

That is an 11th century idea being welded onto a 21st century problem, the Domesday Book meets a unicorn.  The problem isn’t knowing who owns a particular work which evidently is either what they believe or want you to believe.

The problem is that the users don’t want to seek permission or beg forgiveness, either.  They want to get away with it.  This bill demonstrates that unassailable fact in colors bold as the Google logo.

Think about it–by the time you finish reading this post, 1000 songs will be written and 500 songs will be recorded somewhere out there in the world.  Or more.  (Not to mention photographs taken,  paintings painted, chapters written and so on.)

Do you think that songwriters around the world are thinking, now I know what lets do, let’s rush to go register that new song in the U.S. Copyright Office–in the database, the registration section, the recordation section?  Otherwise, I’ll never be able to afford the lawyer to sue Spotify if they don’t pay me.  I don’t think they’re thinking that at all and are about to fall into the MIC Association’s trap for the unwary.  Why the MIC Coalition?  We’ll come back to them.

mic-coalition-no-npr

MIC Coalition Members

In a nutshell, the bill requires the extraordinarily heavy burden of requiring all songwriters and recording artists (or their publishers or labels)–all, as in the entire world seeking to sue in the U.S., not just the US writers–to register numerous fields of data in a yet to be created database if they plan on suing for statutory damages:

[I]n an action brought under this title for infringement of the exclusive right to perform publicly, reproduce, or distribute a nondramatic musical work or sound recording, the remedies available to a copyright owner [ANY copyright owner] that has failed to provide or maintain the information [required] shall be limited to…(A) an order requiring the infringer to pay to the copyright owner actual damages for the public performance, reproduction, or distribution of the infringed work; and…(B) injunctive relief to prevent or restrain any infringement alleged in the civil action.

That means if you haven’t undertaken the formality of registering in this new database, then the user has no exposure to statutory damages and will not have to pay the victorious songwriter or artists attorneys’ fees.  And this new safe harbor applies apparently even if that songwriter or artist has filed a copyright registration under existing law.

There is nothing in the bill that actually requires the protected class to actually look up anything in this new database, or actually be in compliance with existing statutory licenses (such as the webcasting or simulcasting licenses).

So who is in the new protected class entitled to the Nanny State’s protection from those collusive and pesky songwriters and artists?  Let’s look at the victimology of the “ENTITLEMENT” paragraph.

Well, actually, there’s no “ENTITLEMENT” paragraph for the entitled, it’s actually called “APPLICABILITY” (see “newspeak”, WAR IS PEACE, etc.).  The connected class includes five different categories of cronies.

First, the defined term “An establishment” gets the new even safer harbor.  “Establishment” is a defined term in the Copyright Act (in Sec. 101 for those reading along at home):

An “establishment” is a store, shop, or any similar place of business open to the general public for the primary purpose of selling goods or services in which the majority of the gross square feet of space that is nonresidential is used for that purpose, and in which nondramatic musical works are performed publicly.

Like the members of this organization, the National Retail Federation:

mic-coaltion-8-15 Retailers

Then another defined term “A food service or drinking establishment”.  Kind of like these people:

mic-coaltion-8-15 Booze

That is, the National Restaurant Association, the American Hotel and Lodging Association  (aka those who put their kids through college thanks to SXSW) and their suppliers, the American Beer, Wine and Spirits Retailers.

Next, “A terrestrial broadcast station licensed as such by the Federal Communications Commission”.  I guess that would include the National Association of Broadcasters, iHeart, Salem and Cox (which of course raises the question of whether this entitlement also applies to Cox’s Internet group), kind of like these people:

mic-coaltion-8-15 radio

Don’t forget “An entity operating under one of the statutory licenses described in section 112, 114 [webcasting and simulcasting], or 115 [mechanical licenses].”  Note–not that the statutory license applies to the particular song or sound recording in the way it is used that is the subject of the lawsuit, just that the entity is operating some part of its business under one of those licenses regardless of whether the service that is the subject of the lawsuit operates under one of these licenses or not.  (Pandora’s on-demand service compared to webcasting, for example, could be out of compliance with its sound recording licenses but claim the safe harbor because it is “operating under” one or more of the statutory webcasting license in the radio service or the statutory mechanical licenses for songs.)

It appears that would include these people:

mic-coaltion-DiMA Members

and don’t forget these people who are DiMA members and need the government’s protection from songwriters and artists:

Amazon logo

white apple logo

Microsoft Logo

Spotify_logo

And then I guess you could throw the Consumer Technology Association and CCIA in there, too.

So I think that’s everyone, right?

Last but not least there’s this group as “belt and suspenders”:

An entity performing publicly, reproducing, or distributing musical works or sound  recordings in good faith as demonstrated by evidence such as [i.e., but not limited to] a license agreement in good standing with a performing rights society or other entity authorized to license the use of musical works or sound recordings.

Note:  The license need not be for the musical works or sound recordings for which the “entity” is being sued, just any license for any musical works or sound recordings.

There are loopholes in the bill that you could drive a fleet of Street View cars through, so you have to assume that the loopholes will be hacked given who is involved.  Don’t let anyone tell you “oh that’s just legislative language, we can fix that.”  The whole thing has to be voted down.

Let’s call this bill what it is:  Crony capitalism, the triumph of the connected class.  The Domesday Book writ large.

It’s some of the biggest companies in the world deciding that they don’t want to hear from songwriters or artists anymore.

So shut up and sing.

[This post originally appeared on Music Tech Solutions]

 

 

Funny How that Works: @edchristman reports: Irving Azoff, Top Radio Groups Reach Temporary Licensing Agreement

December 27, 2016 Comments off
mic-coalition-rmlc

The MIC Coalition

When two rational actors are economically interdependent on one another, disputes tend to get solved at a market clearing price.  So it is with Global Music Rights and the goliath Radio Music License Committee that itself is a member of the even bigger goliath MIC Coalition.  (My bet is that the Google-backed MIC Coalition is behind the bizarre push for 100% licensing by soon-to-be-former head of the US Department of Justice Antitrust Division, but that’s another story.)

As Ed Christman reports in Billboard:

While the Radio Music Licensing Committee and Global Music Rights continue to pursue anti-trust litigation against each other, the boutique performance rights organization started by Irving Azoff is offering temporary licenses that will allow radio stations to continue playing GMR songs without worrying about copyright infringement lawsuits.

According to a statement issued on behalf of GMR by lawyer Dan Petrocelli of O’Melveny & Myers, representing the PRO in the antitrust litigation; and a letter to RMLC members from RMLC chairman Ed Christian, radio stations have until Jan. 31 to sign an interim license agreement with GMR, which will cover them for playing the PROs songs through Sept. 30, 2017.

Each station willing to enter into the interim license has to contact GMR to see what their fee will be. However, the interim licensing agreement will leave each party the right to seek a retroactive fee adjustment, which could be based on a future licensing agreement subsequent to the interim license; the outcome of the antitrust litigation between the RMLC and GMR; or a possible rate settlement between the RMLC and GMR….

In fact, some music from songwriters in the Who, the Eagles, and by John Lennon and Drake, are no longer covered by ASCAP or BMI, and radio has been playing that music all along during 2016. But people familiar with GMR say they had no intention of suing for copyright infringement as long as RMLC was negotiating rates with the PRO.

Instead, they claim, the RMLC ambushed them with an antitrust lawsuit filed on Nov. 18  in the U.S. Eastern District of Pennsylvania Court by the law firm of Latham & Watkins. GMR filed its own anti-trust lawsuit, via O’Melveny & Myers, against the RMLC in California Federal Court on Dec. 6.

The songs at issue appear to be for GMR writers who left ASCAP in the last couple years, but arguably remain covered by ASCAP (and BMI) agreements expiring at the end of 2016–you know, next week.

What this comes down to, of course, is the one thing that the MIC Coalition doesn’t seem to think songwriters are much entitled to–property rights.  As my old law and economics professor Armen Alchien has written:

A property right is the exclusive authority to determine how a resource is used…One [attribute of private property] is the exclusive right to the services of the resource. Thus, for example, the owner of an apartment with complete property rights to the apartment has the right to determine whether to rent it out and, if so, which tenant to rent to; to live in it himself; or to use it in any other peaceful way. That is the right to determine the use. If the owner rents out the apartment, he also has the right to all the rental income from the property. That is the right to the services of the resources (the rent).

Finally, a private property right includes the right to delegate, rent, or sell any portion of the rights by exchange or gift at whatever price the owner determines (provided someone is willing to pay that price). If I am not allowed [or not required] to buy some rights from you and you therefore are not allowed to sell rights to me, private property rights are reduced. Thus, the three basic elements of private property are (1) exclusivity of rights to choose the use of a resource, (2) exclusivity of rights to the services of a resource, and (3) rights to exchange the resource at mutually agreeable terms….

Private property rights do not conflict with human rights. They are human rights. Private property rights are the rights of humans to use specified goods and to exchange them. Any restraint on private property rights shifts the balance of power from impersonal attributes toward personal attributes and toward behavior that political authorities approve. That is a fundamental reason for preference of a system of strong private property rights: private property rights protect individual liberty.

Or as Gloria Steinem put it, artist rights are human rights.  A host of human rights documents are consonant with this view, starting with Article 27 of the Universal Declaration of Human Rights (which, incidentally, was itself the inspiration for MTP):

Everyone has the right to the protection of the moral and material interests resulting from any scientific, literary or artistic production of which he is the author.

The MIC Coalition routinely runs over the rights of recording artists to fair compensation for the use of their recordings, so it’s a fair assumption that they are used to riding rough on creators and intend to do so with GMRs writers.  We can all be thankful that GMR is both standing up for their songwriters and acting reasonably to allow business to get done.  Hopefully, mega media corporations will decide that their resources are better spent paying a fair royalty to the songwriters that drive their business rather than unproductive litigation.

 

The MTP Podcast: Michelle Lewis and Kay Hanley of SONA and David Lowery on DOJ’s “Union Busting” Gambit Against Songwriters

August 17, 2016 1 comment

In an explosive conversation, Michelle Lewis and Kay Hanley talk with David Lowery and Chris Castle about Songwriters of North America, their experiences with lawyers from the Department of Justice Antitrust Division in the lead-up to the DOJ’s decision on “100% licensing,” and disingenuous behavior by the government’s lawyers that crossed the line into “union busting.”

Michelle and Kay

Michelle Lewis and Kay Hanley

—in an ex parte communication, Antitrust Division Section Chief David C. Kully advised a witness in an ongoing Justice Department inquiry to withdraw from ASCAP as a solution to 100% licensing, knowing she was represented by counsel.

—Justice Department lawyers chose to conduct meetings and telephonic communications with songwriters in which DOJ lawyers read aloud from proposed text of their 100% licensing statement in an effort to build a false consensus among songwriters and refused to provide a written draft of the statement for public comment.

hesse

—At the direction of former Google lawyer and DOJ official Renata B. Hesse, the lawyers also told SONA members that no transcripts existed of these telephonic communications.  If true, it is highly unusual for the Justice Department to engage in such contacts with interested parties without preserving a record of such meetings to be made available to the public and preserved as customary federal record keeping.  The lawyers’ statement is more likely another lie or obfuscation.

 

 

Show notes:

Links to documents we discuss on the MTP Podcast with Michelle Lewis, Kay Haneley, David Lowery on the DOJ’s new policy on 100% licensing.

Songwriters of North America Website

@wearesonala

The Trichordist

cranky

Podcast theme from “March of the Billionaires” written by Davey Faragher, Johnny Hickman, David Lowery & Michael Urbano, performed by Cracker from their 2014 album, Berkeley to Bakersfield used courtesy of Cracker.

Doc McStuffins

Department of Justice Statement on 100% Licensing

MIC Coalition Letter to DOJ Lawyer Renata Hesse

BMI’s Premotion Letter to Judge Stanton re Obama Justice Department Ruling on 100% Licensing

The Obama Administration Is Lame Ducking An Unworkable Burden on Songwriters: 4 Reasons Why It’s Bad Law by Chris Castle (Huffington Post)

Guest Post by Stephen Carlisle: ASCAP and the Terrible, Horrible, No Good, Very Bad DOJ Decision That’s Going to Create Chaos in the Music Industry

MusicTechPolicy Podcasts on SoundCloud

Subscribe to MusicTechPolicy Podcast on iTunes

The MTP Interview: David Lowery on the CRB Webcasting Rates

December 21, 2015 1 comment

This post is the second of a two part interview with Blake Morgan and David Lowery about the newly announced webcasting rates as determined by the Copyright Royalty Board.

MTP: How do you feel about the CRB decision in general as far as rates go?  

Well it’s a mixed bag.  Leans bad.  The rates went up marginally for Pandora, and that seems to be the lead in the press.  But it looks like rates went down for other webcasters.  You saw Pandora stock popped on the CRB news?   Sometimes markets tell you what no one dares say.  The markets are saying that this is good for webcasters and bad for artists.  Of course you won’t see that in the tech or music business press.  [Billboard posted one story on the wave of negative reactions at press time after David’s interview.]

MTP: Was this more of a victory for the Pandora/Clear Channel/Google MIC Coalition or for artists?

Definitely more of a victory for the MIC Coalition, and here is why:  The CRB allowed the Merlin-Pandora and WMG-IHeartRadio [Clear Channel] deals as evidence of free market deals.  I believe that at least the Merlin deal is illegal because it is payola.  IN CONSIDERATION OF ADDITIONAL AIRPLAY value went from Merlin labels to Pandora [now an FCC broadcaster].   Possibly the WMG deal is the same.  I’m less familiar with that deal.  How can an illegal contract be the basis for CRB rates?  What happens if the FCC gets off its ass and rules that Merlin/Pandora deal illegal?  Does the CRB go back and reset rates? Uncharted territory here. Whats next? Multinational corporations contracting to bribe executives to get a lower per stream rate?  Would that be allowed as evidence?  I really think artists need to contest this with the Copyright Office. 

MTP: Do you feel compensated for the value lost from the last CRB when Pandora got the CRB rates cut substantially?  Do you think that the CRB had in mind restoring what was taken away in the last rate setting five years ago?

Well first we have to pretend that micro pennies are a form of compensation. Second the CRB has no business “taking” value from anyone.  They are supposed to be setting rates at market rates.  But, no,  they haven’t made up for the amount that they took from artists last time.  

MTP:  How about no rate increases in the out years other than indexing to the Consumer Price Index?  I saw someone online suggesting that indexing essentially froze the 2016 royalty rate and just adjusted for inflation so that artists essentially would be paid 2016 value for the next five years.

This makes me really mad. This is federally mandated wage stagnation.  Basically this says if there is any “upside” in the value of streaming music over the next 5 years performers won’t participate.  If you think of songwriters and performers as being the public, this is the classic federal scam:  socialized costs/privatized profits.  It’s stunning that people in Washington can’t see their policies create the income inequality they decry.

MTP:  The press seems to always refer to the fact that Pandora “hasn’t turned a profit” yet, and tries to create this impression that Pandora is an otherwise well run company with $1.1 billion in revenue, zero debt, government mandated below market vendors, SG&A over 40% that’s going on an acquisition binge for unrelated businesses with no regard for integration costs—that also can’t manage to “turn a profit”.  Does anything bother you about that press profile?

Welcome to Web bubble 2.0!  I would say I’m looking forward to the coming crash, but I have a feeling that our pension funds will get left holding the bag.   SG &A you mean the Selling, General and Administrative costs right [in Pandora’s income statement]?   This is where they hide obscene executive salaries.  Pandora has paid out over 1/2 billion dollars in executive stock compensation since going public.   Does anyone else find this insane?  No. If you read the press, and I mean The New York Times or Wall Street Journal all you ever hear is how much Pandora is supposedly paying to artists.   I can’t wait for the New York Times to report that GROCERY STORES PAY A SIGNIFICANT AMOUNT OF THEIR GROSS REVENUES FOR GROCERIES!  Where is that headline?  When do we get to hear that sound bite on NPR? 

Seriously, we should offer a prize to MBA students.  Best plan for making Pandora a profitable company.   How many of those plans would start with that 40% SG&A.  

MTP:  How does this MIC Coalition rate from the CRB affect licensing for any streaming service that Pandora may want to launch out of the ashes of Rdio?

Well this doesn’t directly effect the on demand rates, but I’ve always maintained that the artificially low rates paid by services like Pandora, has allowed them to offer music free, which in turn allows the on-demand services to argue for free tiers.   It’s a race to the bottom. Let’s put it this way: This CRB ruling certainly doesn’t help us get better rates from on-demand services. 

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