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@helienne Lindvall on MMA Safe Harbor
It must be said that Music Modernization Act safe harbor was released the same time as CISAC released an economic impact study of the DMCA safe harbor. We think of DMCA as being worse because we’ve lived with it for decades–in decades how will we feel about the MMA safe harbor and is anyone feeling lucky?
Content Creators Coalition & MusicAnswers Applaud the Revision and Passage of the Music Modernization Act by the Senate Judiciary Committee — Artist Rights Watch
PRESS RELEASE
[Washington, D.C.] – The Content Creators Coalition and MusicAnswers released today the following statement on the Senate Judiciary Committee’s vote in support of the Music Modernization Act.
C3 and MusicAnswers applaud the Senate Judiciary Committee’s vote to advance the Music Modernization Act, while incorporating key changes we had urged to make the legislation stronger, more transparent, and more equitable.
The MMA will strengthen the music ecosystem and all its participants, including songwriters, publishers, performing rights organizations, artists, record companies, music services and fans. It ensures digital music services will pay fair royalties for every song they stream, establish a better standard for determining royalty rates, and eliminate some out-of-date provisions of the PRO consent decrees. In return, digital music services get certainty, legal protection, and new streamlined tools to bring more music to more people at lower cost.
It’s a reasonable bargain, and, therefore, we have consistently and publicly supported the basic construct of the legislation.
We are especially grateful that the Senate Judiciary Committee, led by Chairman Chuck Grassley (R-IA) and Ranking Member Dianne Feinstein (D-CA), was willing to engage with our organizations on ways to improve the bill and include in the Managers Amendment approved today key protections for creators and the public.
As a result, the MMA now provides greater transparency, including rigorous audits to make sure that royalties are flowing to the correct parties, a commitment to educating all music creators about their rights and the royalties due them collected under the new Music Licensing Collective (MLC), a requirement to study and follow best practices in order to find the proper owners of unclaimed royalties, and increased clarity regarding who owns the data generated by the new system.
While we support the legislation and are proud of the changes we have achieved as artist and songwriter advocates, we continue to have concerns about three key issues: whether the entity that is designated as the MLC is being foreordained by the bill and precludes competition with the MLC; the composition of the Board of Directors of the MLC, which is unduly tilted towards major publishers; and the methods used to distribute royalties from works where even using best practices the authors could not be identified. We urge the full Senate and the House to consider further improvements to those flawed provisions and we call on the Copyright Office to ensure in implementation of the final legislation that no stakeholder group can dominate the MLC and that all royalties are distributed in a fair and equitable and non-self-interested manner.
The process leading to this moment has been strong in many ways. But it has also included its fair share of divide-and-conquer tactics and efforts by powerful incumbent forces to crowd out grassroots organizations like ours and to divide the music community within itself. We believe that we are strongest when we respect and support each other – a lesson too many in our business still have yet to learn.
We are deeply appreciative of the partnership c3 and MusicAnswers have forged. Together, we represent thousands of writers, producers, performers, and music business professionals, and over the past few weeks we have worked steadfastly to pursue improvements in the MMA. We look forward to future collaboration and welcome the involvement of other collaborative groups and individuals.
What’s Up With @SenSasse’s Vicious Little Amendment on pre-72?
It’s important to know who your friends are, and we’ve learned this week that Nebraska Senator Ben Sasse is not one of them. It’s a bit surprising given Omaha’s musical legacy that starts with the big band era–you know, the musicians and artists Sasse was trying to dis with his amendment to strike the CLASSICS Act pre-72 fix from the Music Modernization Act. Not to mention the Saddle Creek juggernaut.
It’s such a strange little tableau that it’s hard to really understand what in the world Senator Sasse thought he was up to with his vicious little amendment that would stab pre-72 artists and their heirs in the alley. But we learned to keep a close eye on this character who seems to be in league with Senator Wyden, Google, Public Knowledge and the Electronic Frontier Foundation.
So while you think about that one, you may want to have a listen to his fellow Nebraskan, my friend Buddy Miles with my old band mate Wally Rossi on guitar.
Here Comes the Shiv: Sen. Sasse to Move to Strike the CLASSICS Act and Screw Pre-72 Artists
MTP readers will not be surprised to learn that Senator Sasse is circulating an amendment to strike the CLASSICS Act from the Senate version of the Music Modernization Act. The amendment appears to have been drafted by the Google Shills at Public Knowledge.
This is, of course, the classic back stabbing we have come to expect from Public Knowledge, so is par for the course. What that means, of course, is that Google gets to screw the pre-72 artists and get their new reachback safe harbor that the songwriters and publishers gave up.
We need to move on this quickly. If you can call your Senator and ask them to oppose the Sasse amendment to the Music Modernization Act (bill number S. 2823), that would be great. You can look up your Senator’s information on Phone Congress at this link. Choose “Any Other Topic Not Listed Here” on the pull down “Topic” menu.
Ron Wyden’s Teachable Moment: Should one Senator be allowed to stop 415 Members of Congress on the Pre-72 Fix
It’s rare that we get insight into just how sleazy the Congress can be–but Senator Ron Wyden is giving us all a guided tour when it comes to his singular dedication to screwing pre-72 artists. There is a process in the Senate called a “hold” (see this memo from the Congressional Research Service describing the rules for holds) which can seriously slow down passage of legislation. Any one senator can put a hold on any bill, and Senator Wyden appears to be threatening to put a hold on the Music Modernization Act if he doesn’t get significant changes to the pre-72 fix, probably before Thursday’s “markup.”
That would be the pre-72 fix in the CLASSICS Act that was just passed by 415 Members of the House of Representatives. That’s right–ONE senator can replace the judgement of FOUR HUNDRED FIFTEEN elected representatives of the American people. ONE senator can crush the hopes of thousands of pre-72 artists or their heirs, because some people have waited so long to get a fair shake from the Congress that they died.
Why would any senator do such a thing? You can kind of understand this anti-democratic shenanigans on a controversial bill, or a bill that barely passed the House. On this bill, however, I have to believe that Wyden’s threatened hold can only be explained by blatant cronyism and swamp fever. And Oregonians need to know the dark side to Ron Wyden.
MTP readers will remember the story of Senator Ron Wyden (D-OR) and his descent into the swamp. You might think, what’s a senator from Oregon doing up to his eyeballs in cronyism and the slime? Easy answer–cheap hydroelectric power from Oregon’s part of the Columbia River that powers many huge data centers owned by…you guessed it…Google, Facebook, Amazon, Rackspace. Cheap power that goes straight to their bottom line.
Columbia River water vapor burned by Google’s Data Center at The Dalles, Oregon
All get tax breaks of dubious value to Oregonians according to a state audit and cheap power, crowding out local businesses and residents. Each job created by these highly automated data centers costs the local communities up to $800,000–which might make it worth it to pay the companies to stay away.
Google, Facebook, Amazon and Rackspace all are members of the Internet Association, home to Mr. Shoegazer who gives “voting with your feet” a whole new meaning. Google and Amazon are also members of the Digital Media Association or “DiMA”. And DiMA’s grubby little paws are all over the Music Modernization Act, particularly the blanket mechanical license which reads like tech industry lobbyists wrote it.
And Google’s grubby little paws are all over Public Knowledge and the Electronic Frontier Foundation, both card carrying members of the Google Shill List and both leading the charge against the CLASSICS Act, now part of the omnibus Music Modernization Act in the Senate. Remember, the omnibus Music Modernization Act includes CLASSICS as the fix on the pre-72 loophole . CLASSICS allows artists who recorded prior to 1972 and their heirs to benefit from digital royalties when their recordings are played on SiriusXM, Pandora or any other noninteractive radio platform.
Wyden has proposed an insanely complicated and unworkable alternative to the version of CLASSICS that got the Music Modernization Act passed in the House. The only reason that anyone is taking him seriously is because of his threatened hold and he’s going to try to jam this philistine and nonsensical alternative right down the throats of all the artists who had their hopes lifted when the House passed the bill unanimously.
All that Wyden is doing is using the hold system to leverage his way into jacking with the copyright term and throwing a bone to Google, Lessig and the entire anti-copyright and anti-artist crew.
And here’s what he should get for it…
Nothing.
He should get nothing at all and should be sent packing. Let him place his hold and see what happens. He may be narcissistic enough to believe that he’s entitled to replace the vote of 415 of his colleagues with his own cronyism, but we don’t have to buy it.
Nothing. He gets nothing.
The Music Modernization Act’s New Burdens for Labels Identifying Unmatched Songs — Music Tech Solutions
The Music Modernization Act is definitely the gift that keeps on giving. It seems like every time I read it, a new toad jumps out from under a rock.
The latest one I found is a new burden the MMA places on all sound recording owners, large and small. Why? To help the digital services comply with their obligation to locate song copyright owners in order for the services to keep the new “reachback” safe harbor–what we used to call “copyright infringement” but what is called the “Limitation on Liability” for “Prior Unlicensed Uses” in MMA speak. This is the retroactive safe harbor given effect on January 1, 2018 regardless of when the bill actually is passed by both houses of Congress and signed by the President, the new safe harbor that prompted the lawsuit against Spotify by Wixen Music Publishing that was filed on December 29, 2017 after word leaked out about what was actually in the MMA.
Here’s the relevant clause (at pages 100-101 of the House bill):
REQUIREMENTS FOR LIMITATION ON LIABILITY.—The following requirements shall apply on the enactment date and through the end of the period that expires 90 days after the license availability date to digital music providers seeking to avail themselves of the [reachback safe harbor]:
‘(i) No later than 30 calendar days after first making a particular sound recording of a musical work available through its service via one or more covered activities, or 30 calendar days after the enactment date, whichever occurs later, a digital music provider shall engage in good-faith, commercially reasonable efforts to identify and locate each copyright owner of such musical work (or share thereof). Such required matching efforts shall include the following:
(I) Good-faith, commercially reasonable efforts to obtain from the owner of the corresponding sound recording made available through the digital music provider’s service the following information:
(aa) Sound recording name, featured artist, sound recording copyright owner, producer, international standard recording code, and other information commonly used in the industry to identify sound recordings and match them to the musical works they embody.
(bb) Any available musical work ownership information, including each songwriter and publisher name, percentage ownership share, and international standard musical work code.
And yes, that is a double “good-faith, commercially reasonable” predicate–a drafting bugaboo of mine. I guess it means really, really, really good faith and absolutely positively commercially reasonable since they said it twice.
So what this means is that labels are required to provide to digital services a lot of song ownership information that they may or may not have. For example, if the label licenses in a sound recording and puts the publishing payments on the licensor (very common practice) the information might be “available” but it is just not available to them.
Note that despite the fact that “good faith” and “commercially reasonable” are repeated twice for emphasis, those concepts modify the efforts of the digital service and not the efforts of the label to respond. (Not surprising, if you believe as I do that the MMA was largely written by the lobbyists for the services and not the publishers or songwriters.)
At a minimum, the clause should be revised to extend the “good faith” and “commercially reasonable” modifiers to the label’s efforts to provide song information. Having said it twice, why not three times?
There’s also no procedure for how this request is to be made or responded to, nor is there reimbursement of the costs incurred by the label in complying. There’s also no limitation on liability for the label if it provides the service what turns out to be incorrect information.
Of course, what should really happen is that the entire paragraph (bb) should simply be struck. It has long been the practice of record companies to refuse to provide publisher information to digital services and it has long been the practice of digital services to not ask for it.
In all likelihood, the services will engage a third party to do their song research, which is covered in the very next clause:
(II) Employment of one or more bulk electronic matching processes that are available to the digital music provider through a third-party vendor on commercially reasonable terms, but a digital music provider may rely on its own bulk electronic matching process if it has capabilities comparable to or better than those available from a third-party vendor on commercially reasonable terms.
Taking a long look at the clause, it seems reasonable to simply strike the entire clause (I) and keep the labels out of it as has long been the practice, and require the services to either use their own systems or hire a vendor. And that’s where there should be some criteria for what constitutes a proper vendor. If there’s going to be any work done by the labels, then–as advertised–the digital services should pay the label’s cost of compliance as part of the assessment and the label should have no liability if they happen to not have the song information “available”–in a commercially reasonable manner.
We all want the MMA to work, but we also all want to avoid unfunded mandates imposed by the federal government that create unintended consequences.
Goliath Never Learns: Watch Out for Music Choice Duping Artists for Music Modernization Act in Senate
Remember when Blake Morgan called out Tim Westergren for sending emails to artists trying to get them to write their Member of Congress to support the Internet Radio Fairness Act (IRFA) and lower royalties for Pandora? “Million-a-month” Tim really stepped in it that time because he didn’t expect the artists to figure out he was both pushing a deceptive deal on them and treating them like they were idiots. And that started the #irespectmusic campaign.
So now there’s yet another email campaign targeting artists to act against their own interest. This time it’s about preserving a subsidy for Music Choice’s cable music service. If you still have cable, you’ll probably find Music Choice in the highest numbered channels.
Here’s how the subsidy works–which you should know because it’s paid with your money. Music Choice (like Pandora) gets to take advantage of the statutory license created by the Congress in 1998 for the use of your recordings in “noninteractive” digital services. This statutory license is a huge benefit for everyone who uses it as they can avoid individual negotiations, get streamlined royalty accounting to SoundExchange and never have to pay–clutching pearls–artist advances.
Because the license is statutory, the government also has to set the royalty rate you get through a process now conducted by the Copyright Royalty Judges. The CRJs are supposed to set a market rate based on economic analysis and the services using the statutory license pay those rates.
But–some services are more equal than others. Back in 1998, the Congress was trying to encourage investment in a new market for digital music services and so certain named services were given special treatment by the government to protect them from what’s called the “willing buyer/willing seller” standard that more closely tracks market rates. This special treatment was to give certain services that were already up and running in 1998 a break on royalty rates–your royalty rates–through what is effectively a government subsidy that you finance. This was because these “preexisting services” had started their businesses in reliance on the subsidized rates–and guess what, they kind of got to liking that subsidy.
Three of those preexisting services still exist today: SiriusXM, Musak and Music Choice. All three of these companies have enjoyed the break you gave them on your royalty rates for 20 years. However–the reason to give them that break has long passed.
MTP readers will remember this issue came up with IRFA in 2012. As we noted then, SiriusXM’s then-CEO Mel Karmazin told CNBC’s Jim Cramer in an interview about the merger of Sirius and XM Radio, both of which got the same subsidy as Music Choice:
Free cash flow is what enables you to buy back your stock, make acquisitions, pay down debt. And I believe free cash flow is an important metric. Our free cash flow now, is growing– it’s extraordinary. Before the merger we had negative free cash flow of $500 million. Negative free cash flow. This year we will have $700 million of free cash flow. We haven’t given guidance for next year. Analysts have us at a billion of free cash flow and continuing to grow. So it’s a great start.
The Music Modernization Act would switch these three subsidized services onto the same royalty rate as the thousands of other services that somehow seem to get by with the unsubsidized “willing buyer/willing seller” rates. And Music Choice is leading the charge to keep that subsidy that you’re giving them, Musak and SiriusXM. Presumably this is because Music Choice is more sympathetic than the cash-rich goliath SiriusXM.
To the point—Music Choice is evidently sending out an email to some artists (possibly through intermediaries like distributors) to lobby the Senate Judiciary Committee to preserve the Music Choice subsidy. Why? The Music Choice letter they want you to sign tells you:
Many of us have had our careers explode because of the exposure we got first on Music Choice which is critically important to the artist community.
Really. That’s news to me.
And then there’s this:
Being played on just one Music Choice channel is like being played on every radio station in the country serving a particular music format.
No it’s actually nothing like that.
And here’s my personal favorite:
None of the streaming services provide anywhere near the level of promotion and support that we have received from Music Choice.
Exposure bucks, baby. It’s so 1999–back to the future with Music Choice. Where’s that flux capacitor when you need it?
Preserving Music Choice’s subsidy would be a material change in the bill that might be enough to derail the coalition that backed it in the House and that was clearly influential on the Senate Judiciary Committee in the recent hearing. Remember–the Senate version of the Music Modernization Act has to pass the Senate before it becomes law. It also has to pass in essentially the same form as the House version which already passed the House unanimously. Continuing the subsidy to these three services is a material change to the bill that could cause the whole bill to fail.
Which, of course, would be just fine with Music Choice, SiriusXM and Musak because that would also preserve their subsidy.
So heads up–they’re running the old IRFA play all over again. Don’t get duped.
But don’t let that stop you from supporting the Kickstarter campaign to buy a DeLorean DMC-12 for Music Choice so they can get back to the future in the style to which they have become accustomed.
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