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Posts Tagged ‘Pandora’

Holding the Line on Tradeoffs for Statutory Damages

October 1, 2017 1 comment

It is very likely that we will hear about a move to make significant amendments to the Copyright Act at some point before the beginning of campaign season in 2018.  There are a high number of copyright-related bills that have been introduced in the House of Representatives in the current session, so brace yourself for an “omnibus” copyright bill that would try to cobble them all together Frankenstein-style.

A Frankenstein omnibus bill would be a very bad idea in my view and will inevitably lead to horse trading of fake issues against a false deadline.  Omnibus bills are a bad idea for songwriters and artists, particularly independent songwriters and artists, because omnibus bills tend to bring together Corporate America in attack formation.

MIC Coaltion

The MIC Coalition

When you consider that Google and Facebook are part of Corporate America (not to mention Apple), the odds of the independent songwriter and artist, but really any songwriter and artist, just holding onto the few crumbs they currently have crash and burn.  The odds of actually righting wrongs or–God forbid–getting rid of the legacy consent decrees that protect Big Business vanish into the limit.

Of course, what certain elements of Big Tech would really like to do is push all licensing of music into one organization that they could then control through consent decrees or other government regulation and supervision by exercise of the massive lobbying and litigation muscle of the MIC Coalition and DIMA.  While I realize that may actually sound anti-competitive, it is typical of monopolists to use the antitrust law to destroy competition (as Professor Taplin has taught us).   That’s certainly what has happened with the PRO consent decrees–reduced competition and lower royalties.  Not to mention such a licensing organization would collapse under its own complexity.  This is probably why the Copyright Office envisioned a “Music Rights Organization” that would combine the PROs and mechanical rights licensing but provided the relief valve of an new opt-out right so that songwriters could escape the madness.  (“Under the Office’s proposal, except to the extent they chose to opt out of the blanket statutory system, publishers and songwriters would license their public performance and mechanical rights through MROs.”  Copyright Office Music Licensing Study at p. 9)

If you want some ideas about the kinds of property rights that Big Tech wants the government to take away from songwriters and artists, just read Spotify’s most recent filing in the songwriter litigation in Nashville where their lawyer tries to define away mechanical royalties (unsurprisingly, the lawyer is a long-time protege of Lessig).  Why?  Because they are being brought to a trial by their peers on statutory damages for copyright infringement and the potential for having to pay the songwriters’ lawyers due to a statutory right to recover attorneys fees.  (Statutory damages for copyright infringement has long been an attack point of Big Tech and we get a preview of where they want it to go in Pamela Samuelson’s “Copyright Principles Project”–essentially abolished.)

One way or another, the Big Tech cartel (which includes all the companies in the MIC Coalition and MIC Coalition member the Digital Media Association which itself has members like Spotify and, curiously, Apple) is very likely going to go after statutory damages and try to create yet another “safe harbor” for themselves with no burdens–a “friction free” way to infringe pretty much at will because the actual damages for streaming royalties will be pennies.

If the cartel succeeds in eliminating statutory damages and attorneys fees awards, this will truly make copyright infringement litigation toothless and entirely eliminate the one tool that independent songwriters and artists have to protect their rights.  It will neuter massive copyright infringement as alleged in all of the Spotify class actions, not to mention cases like Limewire.

Oh, you say–did you just switch from song copyrights to sound recording copyrights by referencing Limewire?  Yes, I did–because that’s exactly what I predict the DIMA and MIC Coalition have in mind.  Why do I say this?  Because that’s what these companies are backing in the radioactive Transparency in Music Licensing and Ownership bill (HR 3350).  And if you blow up all the current separate bills into one omnibus copyright “reform” bill, the pieces may reconstitute in forms you didn’t expect.

But realize that in almost all the many copyright bills currently before the House of Representatives, the other side is trying to bootstrap unjust harm into a negotiation chip to shakedown creators.  And it’s not just pending legislation–the shakedown is especially observable with the millions of notices of intention to rely on statutory mechanical licenses for songs filed with the Copyright Office.  That’s a nice song you got there, it would be a shame if something happened to it.

Big Tech’s basic negotiation method is to rely on a loophole, bootstrap the loophole to build up the pressure on people who can’t fight back, then run the shakedown to get concessions that should never be made.  This is what Google has done with the DMCA and is the same shakedown tactic on mass NOIs taken by Google, Amazon, Pandora, Spotify, and others–but curiously not Apple.  Somehow Apple has made it work with the most successful digital music platform in history.

Let’s go down the issue list:

Bootstrapped Issue Fix Bill
Pandora and Sirius stopped paying artists for digital royalties on pre-72 recordings—because of loophole based on federal copyright protection for sound recordings Start paying artist royalties on classic recordings made before 1972 CLASSICS Act
Terrestrial radio created a loophole so they don’t have to pay performance royalties to artists on sound recordings; stop artists from opting out Start paying artist royalties for broadcast radio (with protection for noncommercial and small broadcasters) Fair Pay Fair Play Act, PROMOTE Act
Big tech suddenly started using a loophole to file millions of “address unknown” NOIs with Copyright Office after indie songwriters filed class actions Require Big Tech to use existing databases to look up copyright owners or don’t use the songs or recordings. None
No “central database” that has all songs (but no requirement to actually look up anything), requires double registration If songwriters and artists don’t register, then no statutory damages Transparency in Music Licensing and Ownership Act

Blown up into parts:

–Avoid raising mechanical royalty rate or paying artist royalties on terrestrial at all

–How to use the lack of the mythical “central database” as a bright and shiny object to avoid paying royalties and shirk liability for not doing copyright research, an absurd position for companies that owe much of their wealth to their unprecedented ability to profile people around the world and “organize the world’s information”

–Avoid paying statutory damages

–How to avoid paying royalties that should have paid anyway (pre-72, terrestrial, mass NOI) through distorted interpretations of the law or even safer harbors

–Avoid an obligation to actually look up anything (new databases)

–Use any work they want if all they have to pay is actual damages and no attorneys fees

–Keep songwriters and artists from opting out

–Create biggest black box possible

It should be apparent which way Big Tech is trying to push the creative community.  It is important for creators to understand that any legislative concession that the MIC Coalition or DIMA win against songwriters or artists they will then turn around and try to extract in the next shakedown–authors, photographers, film makers, all the copyright categories.

It is in everyone’s interest to support a healthy creative community that will continue to engage fans and do enough commerce to create value for the tech monopolies.  But–it is crucial to understand that it doesn’t work the other way around.

The purpose of the creative community is not to create value for tech monopolies.  It is to support compelling artists and help them engage with fans, and sometimes it is art for art’s sake alone.  If those artists throw off some commercial gain that the tech monopolies can turn to profit themselves, fine.  But creating profit for these monopolists is not the goal of artists.

Instead of creating fake problems to try to extract concessions that further undermine creators like offering ice in winter, the tech monopolies like Google, Spotify, Amazon and Pandora should identify real problems and work with us toward real solutions–and not a loophole-driven shakedown.

 

 

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 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

@hannajkarp: Will Pandora Be Allowed to Create A Spotify-Style Black Box for Songwriters AND Screw pre-72 Artists? — Artist Rights Watch

August 22, 2016 Comments off

 

Members of MIC Coalition That Lobbied DOJ for Changes to ASCAP and BMI Consent Decrees

 

Songwriters are about to allow another digital service to launch with all the makings of another Spotify-style black box.  How will Pandora use the new Copyright Office NOI filing rules to screw songwriters and will foreign societies allow a US user to benefit from blanket licensing when it is not fully licensed in the US?

via @hannajkarp: Will Pandora Be Allowed to Create A Spotify-Style Black Box for Songwriters AND Screw pre-72 Artists? — Artist Rights Watch

daniel-ek-spotify-ceo-2012billoardspoof-2

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. 

The MTP Interview: Blake Morgan and David Lowery on the CRB Rates

December 17, 2015 1 comment

MTP had a chance to catch up to Blake Morgan and David Lowery for an interview about the CRB rates announced yesterday.  This is the first of the two posts with Blake Morgan, read David Lowery’s interview here.

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

While I’m happy the Copyright Royalty Board raised Pandora’s non-subscription royalty rate by 21%, I can’t celebrate fully. The fact that webcasting rates were cut by 25% makes this mostly a wash, and flies in the face of basic respect for music makers.

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

Overall, Pandora is going to have to pay 15% more than they have been paying, so it’s certainly not a victory for Pandora/MIC. Artists are going to get more, so that’s a win. However, it could have been a slam-dunk victory for artists, and I feel this is more of a squeaker.

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 the last time around?

It’s hard for me to climb inside their heads, but it does feel like the CRB decided to make a “some for them over here, and some for them over here” kind of decision. This is a significant cost increase for Pandora, but it’s still less then what we wanted––so it’s like the CRB tried to drive right down the middle. If they were trying to restore what’d been taken away last time, and that’s all, then that would be really disappointing to me.

MTP:  How about no rate increases in the out years other than indexing to the Consumer Price Index?  I saw someone online suggesting that 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.

Yeah, that’s a little how I feel. But, I hope it doesn’t matter because there’s such a strong possibility that Pandora won’t even be around in five years. At least if they continue to run their business the way they have been recently.

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?

I have yet to meet a music maker who isn’t bothered by this. Far too many people have noticed that Pandora’s founder, Mr. Westergren, has bought and is building what’s being widely reported as a “massive” mansion, with 14 bathrooms. Not turning a profit? How full of shit do you have to be to need 14 bathrooms in your house, man.

MTP:  What’s the reaction in the #irespectmusic community to this latest move by the MIC Coalition?  Do the new CRB rates make getting a royalty for terrestrial more or less important?

Securing a terrestrial radio royalty for artists remains the singular issue in this fight for music makers’ rights and respect that everyone I talk to supports. They agree it’s embarrassing that we have to even talk about it, that it’s embarrassing for us as a nation to not have it, and it’s critical in winning. Simply put: it couldn’t be more important. It’s a century overdue, and it’s time to get this done for American music makers.

Useless Streaming Artist Data: You Know Where to Put the Thumb

December 14, 2015 1 comment

Pandora and Spotify (among others) have made a big deal out of providing “data” and “analytics” about streaming uses to artists–and particularly managers–about how the artist is performing on their respective services.  The “artist data” meme is also offered up as a value add to counter complaints of low royalties.  There is a real question of how useful this “artist data” is and a recent CNBC article calls into question just how accurate it really is in the first place.

Of course the most valuable piece of “artist data” that services could at least help the artist acquire–the fan’s email address–they won’t touch.  Obviously, I’m not suggesting that the service hand over the fan’s email address to the artist without the fan’s consent, so let’s not go down that rabbit hole, a favorite of the services trying to avoid this issue.

What I am suggesting is that the service provide the fan with an opportunity to sign up for the artist’s own email list.  This could be as simple as a link that would take the fan outside of the service momentarily to the artist’s email list sign up page.  That way I don’t believe there are any privacy law issues for the service as there would be if the service just handed over the email address.

I have raised this with senior executives at Apple and Spotify and it went nowhere.  The Spotify person rejected the idea outright because it would take the Spotify user (aka the artist’s fan) outside of Spotify.  Strange, because the fan would be offered a choice.  You know–the fan of the artist who most likely was driven to the service by the artist they are streaming.  (This would produce another interesting metric based on the number of email list sign ups by service, but I digress.)

Aside from whether the type of information being provided is even useful to artists, there’s another question of whether the “artist data” is even accurate in the first place.  And how would you even know.

CNBC did a little fact checking on streaming data provided by iHeart Radio analyzing the recent Grammy nominees.  This isn’t exactly the same as the “artist data” being hawked by streaming services, but it is perhaps a good proxy (since it’s hard for artists to see each others artist data results).

iHeartRadio (owned by Clear Channel) gave CNBC the “artist data” for the most popular tracks on Clear Channel’s massive streaming operations.  But CNBC discovered by using simple logic–aka sequential thought–that Clear Channel’s “artist data” was wrong.  Because CNBC concerned itself only with massive hits, data checking was relatively simple (which of course makes the Clear Channel screw ups look even more idiotic).

Keep in mind as you read this that if you’re an artist using the “artist data” for its recommended purpose–discovering nuances about the service’s listening audience–it will almost certainly be more difficult if you’re not Ed Sheeran or Taylor Swift.

 

In a blog post based on the original (aka wrong) data, iHeartRadio said Ed Sheeran took home the honor of “most-thumbed up” track of 2015 with “Thinking Out Loud.” Taylor Swift’s three big songs relegated her to second, third, and eighth place. (Update: the original iHeartRadio blog post was taken down. The link above is a cached version.)

More impressive in the original data was that Drake’s “Hotline Bling” was the most-thumbed up track in 26 states in 2015. That would be amazing because the song only came out in July and didn’t really catch on until the colorful video was released in October. Here is exactly what the blog post said about Drake:

Although the track didn’t premiere until mid-2015, with the unforgettable music video coming out just weeks ago, the last-minute addition of Drake’s “Hotline Bling” surprised and delighted the ears of listeners across the country, leading it to become the No. 1 most thumbed song of 2015 across more than 20 states!

But this didn’t make sense to us. Sure Drake’s song was popular, but how could it be the top song in half of all states even though it was only hot at the very end of the year?

More weirdly: how could Drake’s song be No. 1 in half of the states but not appear anywhere in the top 10 songs nationally.

CNBC pointed this out to Clear Channel, who admitted their mistake and “corrected” their bad data.  Yet that “corrected” data was FUBAR also according to CNBC:

The new data included the actual number of “thumbs up” and “thumbs down” by state. Of note is that Ed Sheeran’s “Thinking Out Loud” is the “most thumbed up” track in only one state — Hawaii. We find it is extremely unlikely that his track was actually the top track in the nation overall. IHeartRadio has not yet responded with further clarifications about the rest of its data set. We can’t check that against its original report, but we’re hoping to find out soon.

Of course, the new data set only included raw “thumbed” numbers for the top track in each state, so it’s possible that “Thinking Out Loud” had enough second-ranked “thumbs” to overcome Taylor Swift’s “Style,” but that seems unlikely.

So the thumbs didn’t have it after all?  Clear Channel miscounted?  Hard to say because we are entirely dependent on Clear Channel to provide the data backing up their work product.  But we know there was some kind of screw up because CNBC had to provide a link to a cached copy of the original Clear Channel blog post with the bad data.  If there’s no agenda here, why would Clear Channel try to hide their mistake from artists?

But good work by CNBC–except for one thing.  They continued the streaming service meme that somehow talent buyers and concert promoters care about how many thumbs you get when deciding to book a gig.

[C]oncert planners and promoters depend on data like this to create touring routes.

No, no, a thousand times no.  Clearly CNBC have never met a talent buyer. This is just simply not true.

Nonetheless, this CNBC post is a great example of how unreliable this “artist data” can be and just how hard it is to verify.  So hard that it may well be simply misleading to ask artists to take a lower royalty rate for what is most likely some species of snake oil.

They can keep their thumbs.  I’ll just settle for asking the fan to sign up on the artist’s site, thank you very much.

 

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