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A Look at Christopher Sprigman’s Recent Record

July 16, 2019 Comments off
Sprigman 1

Sprigman Throws a Definition at Blake Morgan

The Spitting Image of the Modern Major General

MTP readers may remember the name Christopher Sprigman.  Most recently,  we have identified him as a counsel to Spotify in the “Nashville cases” brought against his firm’s client Spotify by four plaintiffs represented by well-known and successful artist rights attorney Richard Busch.   These were cases brought against Spotify in Nashville for claims of copyright infringement by independent publishers who opted out of both the NMPA settlement and the Lowery & Ferrick class actions.  (Just to be clear, Lowery had nothing to do with the Nashville cases.)

Sprigman PHV

Professor Sprigman also teaches at the New York University law school in New York and evidently has an of counsel relationship with the distinguished New York law firm Simpson Thatcher.  According to his law firm biography:

“Chris is a tenured faculty member and Co-Director of the Engelberg Center on Innovation Law and Policy at New York University School of Law, where he teaches intellectual property law, antitrust law, competition policy and comparative constitutional law.”

Simpson Thatcher is one of those ultra white-shoe corporate law firms, a very conservative reputation and also highly respected around the world.

Sprigman Lowery

Pot, meet kettle

Professor Sprigman has a history in copyright circles dating back to at least 2002, i.e., before he worked on Simpson Thatcher client Spotify.  His selection to represent Spotify may be explained as simply as Professor Lessig was not available, but it’s more likely that his past work informed his selection as is usually the case.  Nothing wrong with that.

Some of Sprigman’s academic writings can be found on his SSRN author profile.  At least a few of these papers (that we know of)  were co-funded by Google.  That Google connection evidently is a topic of some sensitivity with Professor Sprigman as it was that point that seems to have prompted his unprovoked and public comparison of David Lowery to Alex Jones.

Blake Alex

Aside from the depressing reliability of the Alex Jones Corollary to Godwin’s Law, this was both a shocking yet curious comparison.   Why Alex Jones, of all people?  What about Alex Jones is of relevance to David’s role in the artist rights struggle?  I am of the view that it carried with it an implied threat–Sprigman could get his buddies in Big Tech to deplatform David just like Alex Jones.  Why?   My guess is that it is because Sprigman apparently wants you to believe that David’s message was just as toxic to Twitter.   (David was not even involved in the initial Sprigman exchange at all and tells me he had no idea it was even going on.  He was on the road with Cracker and Camper Van Beethoven, you know, selling T-shirts like a good boy.)

Sprigman Lowery 2

The non denial denial

It All Starts with the Disney Fetish

Professor Sprigman has a long-term connection to Professor Lessig, beginning with a 2002 article “The Mouse the Ate the Public Domain” supporting Lessig’s losing argument in Eldred v. Ashcroft attacking the 1998 Copyright Term Extension Act.  (“Most artists, if pressed, will admit that the true mother of invention in the arts is not necessity, but theft.”  How very 1999.)

It will not be surprising to learn from the NYU alumni blog introducing Professor Sprigman that Lessig is his “mentor” (“Sprigman set a goal of writing an article within four months that he could take on the job market, if his mentor and the [Stanford Center for the Internet and Society]’s founder Lawrence Lessig deemed it satisfactory. The result was a paper that reintroduced the idea of formalities in copyright law. Its boldness won Lessig’s approval.”)  Ah, yes.  Fortune favors the “bold.”

A younger and perhaps bolder Sprigman held a 2003 fellowship at Stanford’s Center for the Internet and Society (founded by the very bold Lawrence Lessig III and later funded by the even bolder Google in 2006 with a $2 million gift).  This academic fellowship evidently produced his 2004 article “(Re)Formalizing Copyright” boldly published by Stanford and, in a nutshell, advocating a requirement of copyright registration.  (My view of this fascination that many of the Lessig crowd have with registrations is to create a giant loophole that would allow Big Tech to use “unregistered” copyrights (especially photographs) as they saw fit.  Boldly, of course.)

As a quick aside, MTP readers will recall that the “address unknown” NOI debacle makes clear that even if works are registered and readily available through searchable databases that currently exist, Google, Amazon, Spotify and some others cannot be trusted to look for the sainted registrations.  These companies appear not to have looked or not to have looked very hard before attesting that they had searched the Copyright Office records in their 70 million or so address unknown filings.  Even allocating 5 minutes per copyright for search time, it would have taken over 350,000,000 minutes (or 5,833,333 man-hours, 243,055 man-days or 665 man-years.  Roughly speaking.  Feel me?  Curiously, Apple never used the address unknown loophole.  It is unlikely that a registration-based system (which the US abandoned decades ago) would produce the promised results but would produce a substantial burden on all copyright owners, especially independents–not to mention the productivity loss to the Copyright Office itself.

This registration loophole is also a core Lessig concept that he pushed during the orphan works bills of the 2006-2008 period (see “Little Orphan Artworks”.  It is echoed in the Music Modernization Act with the requirements to register with the Mechanical Licensing Collective under Title I (at least if you want to be paid outside of the black box) and the registration requirements under Title II for pre-72 copyright owners imposed by Big Tech’s favorite senator, Ron Wyden.  Note neither requirement requires a formal copyright registration so doesn’t go as far as Lessig, Samuelson and Sprigman, but it’s headed that direction.

David Poe Woodward

Sprigman later was co-author with Lessig of the Creative Commons filing to “save” “Jewish cultural music” in 2005 orphan works consultation by Copyright Office.

creative-commons-2008-schedule-b ANNO

In 2006, Professor Sprigman was lead counsel with Lessig on the losing side in Kahle v. Ashcroft (later v. Gonzales) which unsuccessfully challenged the elimination of the renewal requirement under the 1992 Copyright Renewal Act.  He went on to write “The 99 Cent Question” in 2006 attacking iTunes pricing.

Association with Pamela Samuelson

Pamela Samuelson is another registration fan in the professoriate, so it was not unexpected that Samuelson and Sprigman would find each other.  Among his other accomplishments, Professor Sprigman was a member of Pamela Samuelson’s “Copyright Principles” project and co-authored its paper that also advocated registration (see Sec. IIIA of paper, “Reinvigorating Copyright Registration”).  (MTP readers will remember Samuelson and her husband the tech maven Robert Glushko from the Samuelson-Glushko IP units at various law schools in the US and Canada that consistently oppose artist rights.  A critic might say that the Samuelson-Glushko academic institutes are like Silicon Valley’s version of Confucius Institutes.)

The Copyright Principles Project is especially relevant to Professor Sprigman’s outburst regarding David Lowery because of what I would characterize as the utter failure of Pamela Samuelson to make an impact when she testified before the House Judiciary Committee’s IP subcommittee in 2013.  This missed opportunity was, I think, largely due to Lowery’s takedown of the “Project” that appeared in Politico hours before she testified which Chairman Goodlatte asked to be entered into the record of the hearing where it sits to this day.

Lowery Politico

It’s worth noting that there were no creator members of the Copyright Principles Project, and Samuelson was questioned sharply about this by the IP subcommittee–it sounded like staff had been fed the “Case Study for Consensus Building” without being told that an important group had been omitted from the “consensus”.  Her response was that she didn’t need any creator members on the Copyright Principles Project because she was herself an academic writer.  I think it’s fair to say that while I didn’t see any of the Members laugh out loud, her response was viewed as rather weak sauce in light of Lowery’s post in Politico.   That exchange appears to have led to Samuelson founding the “Authors Alliance” after the hearing evidently to shore up that shortcoming.  Too late for the Copyright Principles Project, however.

All Hail the Pirate King

Like his mentor Lessig, Professor Sprigman also seems to have an interest in defending the alleged benefits of piracy and apparently is a leader of the “IP without IP” movement (and co-author of the piracy apologia, The Knockoff Economy: How Imitation Sparks Innovation.)   (See also what we call the “pro-piracy” article “Let Them Eat Fake Cake: The Rational Weakness of China’s Anti-Counterfeiting Policy“.  “[M]ost of that harm [of counterfeits and piracy], at present and for the foreseeable future, falls on foreign manufacturers”–this means you, songwriters.)  He frequently writes on pro-piracy topics with Professor Kal Raustiala of the UCLA School of Law of all places.

It should come as no surprise then, that he represented Spotify in the Nashville cases.  He was co-counsel on Spotify’s papers (with Jeffrey Ostrow from Simpson Thatcher) famously making the losing argument that, in short, lead to the conclusion that there is no mechanical royalty for streaming (after the usual Lessig-esque Rube Goldberg-like logic back flips).  In Sprigman’s America, his Big Tech clients would not pay streaming mechanicals to songwriters at all, an issue that was emphatically put to rest in the Music Modernization Act.  (In a curious case of simultaneous creation, Techdirt came to almost the identically flimsy argument.)

David Poe Delete S

What Did We Ever Do to Him?

But before last week, Professor Sprigman most recently came onto the radar in his chairing of the American Law Institute’s Restatement of Copyright which many (including me) view as a political end-run around the legislative process.  Register of Copyright Karyn Temple said the Restatement of Copyright “appears to create a pseudo-version of the Copyright Act” and would establish a contrarian view of copyright under the mantle of the august American Law Institute.  It’s unclear to me who, if anyone, is financing the Restatement.  (MTP readers will recall The American Law Institute’s Restatement Scandal: The Futility of False “Unity”.)

Aside from the fact that the normal world is not waiting for the Restatement of Copyright, it is hard to understand how a person with such overtly toxic attitudes toward uppity artists like Blake Morgan, David Lowery and David Poe should–or would even want to–participate in drafting the Restatement.

Unless they had a reason.  Like providing a citable text holding that piracy is groovy, for example.  Originalists come not here.

As Kevin Madigan observed:

It’s not difficult to understand the creative community’s unease when taking a closer look at two of the projects leaders. The Restatement was originally the idea of Pamela Samuelson, a Professor of Law at UC Berkeley who is well known in the copyright academy as someone who has routinely advocated for a narrower scope of copyright protection. And while her knowledge and expertise in the field is unquestionable, her ability to take an objective approach to a project meant to influence important copyright law decisions is suspect.

While Professor Samuelson’s academic record reveals that she may not be the most suitable candidate to spearhead a restatement of copyright law, the project’s Reporters—those responsible for drafting the restatement—are led by Professor Chris Sprigman, whose work in academia and as a practicing attorney should undeniably disqualify him from this highly influential role.

Yet as of this writing, the American Law Institute still lists Professor Sprigman as the “reporter” of its Copyright Restatement project.

ALI Copyright

As one artist asked me of Sprigman, what drives him to be so consistently on the wrong side?  What did we ever do to him?

badbunny

(h/t to Fox of TO)

 

 

Guest Post by @poedavid: “Dance Like Nobody’s Paying?” Spotify isn’t

July 15, 2019 1 comment

[We’re thrilled to welcome David Poe to MTP!]

by David Poe

Spotify’s disastrous “dance like nobody’s paying” ad campaign has now been demolished in the national press, garnering negative coverage in Newsweek, Billboard, NME, Hypebot, and more. Sometimes big corporations slip up and show us what they really think of us, and this was one of those times.  

But what’s Spotify’s plan?  Here, Variety’s Patrick McGuire suggests Spotify’s intent is to divide listeners and musicmakers:

Similar to the way many people bite into a cheeseburger with no consideration for the cow and farm of its origin, campaigns like Spotify’s widens the growing divide between listeners and creators. Audiences intellectually understand that music doesn’t magically materialize out of nothingness for the exclusive purpose of entertaining them, but as music continues its irreversible transition to all things digital, listeners are becoming less aware and interested in how artists create, record, produce, and share music. With a 2017 Nielsen Music report showing that, on average, Americans now spend over 32 hours a week listening to music, it’s clear that music is hugely important in the lives of listeners — just not in ways that provide meaningful visibility and support to musicians.

Ever heard that song “Put another nickel in / In the Nickelodeon”? It’s from 1950 (written by Stephen Weiss & Bernie Baum.)

Everyone loves streaming. But more than half a century later, most streaming services contend that a song isn’t worth a penny. I respectfully disagree.

Because a song isn’t really a song until someone listens to it, no  musicmaker should be faulted for utilizing all available platforms. But streaming in 2019 forces music makers and fans into the middle of a moral hazard. Music enthusiasts should be able to listen to streaming music without having to compromise their scruples, or that of their favorite bands.

Despite the lack of transparency in the music industry, The Trichordist has managed to cobble together an annual Streaming Price Bible.  It is the most credible summary I’ve found on what each streaming service pays, which may impact where Spotify listeners choose to put their dough-re-mi:

2018_streamingbible

How Bad Is it for Music Makers?

You can easily see from the chart what each service pays for recordings.  At about $0.003 per stream, Spotify pays little but has the greatest market share.  At about $0.0002 per stream, Google/YouTube is even worse. 

Very different companies. Their commonality: free music, which has made them rich from ad revenue and data scraping, but mostly from their stock price increasing at the expense of musicmakers. 

Let’s put this in context.  To earn a monthly US minimum wage, an artist on Spotify would need 380,000 streams by some estimates.

To make the same monthly salary as the average Spotify employee, a songwriter would need 288,000,000 streams.

Frozen Mechanicals

For reference, the statutory rate for a song on a CD or download is 9.1 cents — 4.1 cents more than ye olde Nickelodeon of the 1950s. 

FROZEN MECHANICALS 1909-1977

You might say that’s better than the old days—but it isn’t as good as it looks, because the song rate was frozen for 68 years before it began gradually increasing … only to be frozen again in 2009, where it will stay until 2022.

FROZEN MECHANICALS 2009-2022

Clearly, streaming has all but replaced CDs and downloads, but without replacing revenue from songs to musicmakers. 

Money is being made from streaming if you look at it on an industry-wide basis.  But—due to the hyper efficient market share distribution of the “big pool” revenue share accounting instead of a user-centric model (or the “ethical pool,”) individual music makers are far worse off.  More than ever, streaming revenue is not paid to music makers who don’t share in the big advances or Spotify stock. 

You Can’t Compete With Free

The vast majority of Spotify users are in the “free tier”. By offering free access, Spotify artificially distorts the streaming market and disallows competition amongst streaming companies. As musicians have learned the hard way, you can’t compete with free.

Spotify likes to say it’s artist-friendly, a tool for music discovery. 

Guilty of chronic copyright infringement, Spotify was founded by a former pirate.  It’s a corporate ethos built on theft.  The Music Modernization Act essentially gave Spotify a new safe harbor, but its tactics haven’t changed.

There’s additional shadiness here: allegations of gender discrimination and equal pay violation, expensive, state-subsidized offices, executive  bonuses, corporate lobbyists, a dicey DPO and of course, the “fake artist” scandal.

Spotify’s ongoing lobbying campaign against artist rights continues despite the unanimous passage of the Music Modernization Act in Congress last year (and the jury is out on the MMA and Spotify’s safe harbor).  Shocker—Spotify apparently reneged on agreements it made to accept the Copyright Royalty Board’s mandated increase in songwriter pay.  Another bonehead move that was publicly rebuked by songwriters from Spotify’s “secret geniuses” charm offensive, including Nile Rodgers and Babyface.

Spotify was joined by Amazon, Google, and Pandora in “suing songwriters” to appeal the Copyright Royalty Board’s ruling that increased the paltry streaming mechanical rate, which Spotify lawyer Christopher Sprigman argued against in court.  

Apple Music does not have a free tier and yet was the only major streaming service that did not challenge the new royalty (44% more, which means 0.004 instead of 0.003, which is still bullshit.)  

This may be because Apple recognizes that music helped save its ass from financial ruin 20 years ago. Math is not my strong suit, but numbers indicate music (via the iPod, a now-obsolete door stop) generated nearly half of Apple’s accumulated wealth not to mention introducing a new audience to Apple’s other awesome products.

Or it could just be that Apple understands creators and may actually like us.  There’s a thought.  We were early adopters—Macs have been in every recording studio and creative department for decades.   

Apple Music’s intent to increase artist pay to a penny per side is its best yet, but now long overdue.   Which is a shame, because a trillion dollar market cap company could afford to redistribute some wealth.  If Apple offered a fair alternative, most would run screaming from the competition.

The Generational Problem

There are many who are more expert than me, some quoted in this post. I’d rather be staring into space strumming guitar and writing a song than here discussing music and money. 

But I’m concerned for the next generation of artists, especially the musical innovators. Here’s why:

There used to exist a sort of musical middle class. Artists in all mediums expected financial struggle but there was the possibility of making a living and even growing as an independent artist.  That might include a record deal or selling CDs at a gig in order to make it to the next town. 

Songwriters could get an album cut and get by or even do well if the album sold (Jody Gerson has a great explanation of this.)  Musicians of quality could see a light at the end of the tunnel.

Streaming has “disrupted” all of that.

Light’s out. 

Bands’ streaming access may—may—help build an audience that may somehow convince talent buyers to book gigs that route your tour, which is awesome. But sustaining a career is still cost-prohibitive for many. 

Thus the Top 40 is full of the children of the affluent. 

Not children of millionaires: Stevie. Dylan. John & Paul. Aretha.

Those of us who have been making music for awhile will remember the optimistic, 1990s-era “monetize the back end” argument: bands on the road can make up income lost to streaming by selling merch. 

I tour, too. I wish the best to every band who does so. 

But not every musician can travel … or got into music to sell a fuckin hat.

Another common sense rebuttal to “shut up and tour:” INCOME FROM LIVE SHOWS WAS NEVER MEANT TO REPLACE THAT OF MUSIC SALES — plus both have investment costs and overhead to produce.

Gas costs what gas costs. 

Mics cost what mics cost. 

Streaming doesn’t pay what music costs.

Sorry to yell. Just sick of this lie that to make up for streaming losses all recording artists, especially senior citizens, should tour forever. Or the assumption they are all rolling in dough! Tell that to the punk rock drummer, alto player, the cellist, the songwriter. 

Note: It’s almost impossible to buy a new car or laptop that plays a CD. Low income streaming has effectively replaced higher income physical sales. 

So if streaming is to be the primary method of music distribution — if not the only one — then pay artists fairly.  Or it really will be lights out, if not for the huge artists who regularly celebrate stupidity then for the ones whose songs you want played at your funeral.

Without musicmakers, Spotify has nothing. When Spotify says “dance like nobody’s paying,” it’s because they don’t. 

Given support from listeners and lawmakers, this era of economic injustice via streaming may one day be a footnote.  Fans should not be paying for music they don’t listen to which is what has been happening and is a hallmark of streaming gentrification.

Now, listeners must demand fair pay for musicians they claim to love, whether it is higher streaming royalties or a user-centric royalty allocation—or both.

#IRespectMusic 

Predictions: Spotify To Incubate the No Records Label Group

January 2, 2019 Comments off

Streaming services like Spotify are faced with a squeeze–how can they be more like Facebook?  That means how can they really get into that Web 2.0 game by deceiving more people to work for them for free while retaining 100% of the revenue for selling their work product?  Or better yet, get people to pay them real money in return for promo bucks?  (Or in the Lefsetz world, Bitbob.)

Some people think that Spotify will or should “start a label”, like that’s as easy as buying razorblades.  Remember–Spotify’s top executives are richer than Croesus and got that way while stiffing songwriters in the millions and even managed to change the law to create a new safe harbor so that they could continue to do so.  Talk about gaslighting!

Why would such people want to get their hands dirty and “start a label”?  More likely they would adopt the “No Records” model.

No Records was an imaginary label I dreamed up on the handful of exceptionally frustrating days at A&M.  The No Records business model was to sign major artists to record the next record they released after they got dropped.  No Records signed Bruce Springsteen, the Rolling Stones, Drake and so on and promoted itself as having all those artists signed, but never released any records as long as those artists were signed to another label.  Which means, of course, if you were a No Records executive you did no work because you had…no records.  And if by fate you found yourself with an actual record delivered to you, then you would get laid off and paid as a consultant for a few years to not work any record that was delivered.

Now this is a perfect business model for Spotify.  Kind of a small batch AI-driven artisanal curation.  No one would ever have to find out that Spotify executives know nothing about developing or breaking artists, but they could promote the artists they signed to No Records by playlists for the current records of their future artists.

Because that’s the key, you see.  To have no records.  Ever.  But Spotify could tell Wall Street they were starting a label to compete with real record companies and journalists would dutifully write stories about how Spotify was a threat to the record company ecosystem.  With no records.  While they continue to sell stock to the greater fool.

 

The Ethical Pool Future: Will Fans Cut the Cord to Big Streaming Services if Artists Leave?

November 30, 2018 Comments off

Everybody knows that the boat is leaking
Everybody knows that the captain lied…

From Everybody Knows by Leonard Cohen

I wrote up my take on “user-centric royalties” a few weeks ago in a post titled “Arithmetic on The Internet: The Ethical Pool Solution to Streaming Royalty Allocation.”  The post has been widely read in the artist community and stimulated conversation about the current model of royalty allocation by streaming services that artists like Sharky Laguana have led the debate on.  I argue that the current model results in the hyper-efficient market share distribution of streaming revenues that effectively bypass the independent artists who fans listen to on the subscription streaming services.

Hyper-efficient marketshare distributions can have unintended pernicious effects due to the impact on the per-stream rate.  If you have a big market share, you don’t care much about per-stream rates because you get minimum guarantees and probably non-recoupable “technology fees” that help protect your downside and defray your accounting costs.  (Particularly important to independent labels whose streaming accounting costs may exceed streaming revenue.)  If you are an independent or “niche” artist, the per-stream rate is everything because you won’t be getting advances or technology payments.

Crucially, that hyper-efficient distribution almost guarantees to a mathematical certainty that per-stream rates will decline over time if service revenue fails to increase at a rate that exceeds the increase in the total number of streamed recordings.  The Trichordist has documented that the per-stream rate has declined by 16% over the 2014-16 period–which happened at the same time as we are told that streaming accounts for over 50% of industry-wide recorded music revenues.  If streaming revenue declines on a per-stream basis while expanding to a larger share of over-all recorded music revenues, the negative effects on the per-stream rate will almost inevitably hurt independent artists, as well as genres like instrumental jazz and classical.

As we found in a recent reader poll, many fans–even many MTP readers–are unaware that an overwhelming share of their streaming service subscription revenue is paid for music they didn’t listen to (and performed by artists they don’t care for in some cases).  Assuming that MTP readers may be more aware of these inequities than the average fan, many if not most consumers may be in the dark about where their money actually goes, which may have an effect their buying decisions and a ripple effect through the market.

question 1

question 2

There’s little doubt that the status quo is unsustainable even though the transition from high to low-or-no margin goods may be irreversible.  Recently, Canadian artist and producer Danny Michel wrote a must-read op-ed for the current edition of the Vancouver Weekly that highlights the motivation behind the Ethical Pool.  Titled “The Expiration Date on Music”, Danny describes his own experience, which of course is echoed by a chorus of independent artists and songwriters around the world:

I’ve been a full-time musician for 25 years. It’s been nothing but hard work, but I love hard work. My songs bought my home, my studio, paid the bills and more. Through it all, the conversations backstage with other musicians have always been about music, family, guitars, friends, art, etc… But in 2018 that conversation changed. Everywhere I go musicians are quietly talking about one thing: how to survive. And I’ve never worried about it myself UNTIL 2018. What I can tell you is my album sales have held steady for the last decade until dropping by 95% this year due to music streaming services.

And therein lies the rub:  You cannot trade a high margin sale at a wholesale price of $5-$10 for a replacement with a wholesale price of a fraction of a fraction of a penny without an unrealistic corresponding exponential boost in activity.

The math is stacked.

Based on the Trichordist’s Streaming Price Bible, it takes roughly 1,600 streams on Spotify, 950 streams on Apple Music, or over 10,000 on YouTube to replace one physical or digital album that sells at a venue or retailer with $7 of net revenue to the artist.  (This revenue variation across services is one reason the TEA math doesn’t really work.)   Venue sales are incremental revenue–you’re already spending to market the show.  Due to streaming, venue sales have all but evaporated in the last few years at an increasing rate as Danny Michel observes.

The fan at the show is in direct contact with the artist in real time when the fan comes to a show the artist is already promoting.   If the fan leaves the show empty handed, it will probably be difficult to get that fan to remember to stream the new artist when they launch their service player.

Getting fans to stream the record usually requires additional effort if not expense–a key reason why it’s important at the show to get that fan’s email at least or some other way to get in touch with them outside of the music service.  As one astute independent label put it, “if the devil made me choose between selling 25 CDs at a show or getting 25 fans to sign up to an artist’s email list, I’d have to think about it for 5 minutes.”  The email signups are a hope for future revenue to make up a shortfall that will likely never be made up on streaming.

Absent getting that fan’s email, independent artists are largely at the mercy of playlist gatekeepers to the point that many are asking if they really want to continue to participate in the major streaming services.  As long as those services have little interest in allowing subscription rates to increase or pay royalties at a level that allow independent or niche genre artists and songwriters to sustain themselves, there’s less and less reason to participate.  And hyper-efficient market share distributions are already causing some artists to like cutting the cord with big services–the only question is how to get their core fans to follow them.

 

Must-Read by @LizPelly: Discover Weakly: Sexism on Spotify

June 8, 2018 Comments off

De6lz41WkAA6SNa.jpg-large

Liz Pelly demonstrates how Spotify perpetuates gender stereotypes.  Spotify–where A&R stands for “Algorithms and Redirects .” Why are we helping these people again?

“Spotify has actively steered its listeners away from the album as a format and toward playlists. This serves Spotify’s interests: a music culture dependent on playlists is dependent on Spotify, whereas a music culture dependent on albums is dependent on record labels. As Spotify vies to become more powerful and influential than labels, emerging as the music industry’s new center of power, one of its primary strategic focuses has been on playlists—curated by humans, algorithms, and sometimes a hybrid approach—making the process of navigating its platform more convenient and ever more personalized.

As a result, Spotify’s most popular playlists have emerged with outsize influence. After I created a new Spotify account earlier this year for this very listening experiment, when I clicked the “albums” tab on my brand-new account, Spotify responded, “Your favorite albums will appear here,” followed by, tellingly, “Go to your Browse page to find amazing playlists for every mood and moment.” A small but powerful gesture: at every turn the platform encourages playlists over albums. This, of course, raises several concerns regarding how fans relate to music and even this music’s context. Which is all to say: in the realm of Spotify, playlist placement matters. A lot.”

Read the post on The Baffler (h/t Artist Rights Watch)

@musicbizworld: Universal Commits to Sharing Stock Sale Proceeds with Artists

March 11, 2018 Comments off

According to Music Business Worldwide, Universal has committed to sharing profits from the sale of Spotify stock.  The exact quote is:

“CONSISTENT WITH UMG’S APPROACH TO ARTIST COMPENSATION, ARTISTS WOULD SHARE IN THE PROCEEDS OF A [SPOTIFY] EQUITY SALE.”

Sources close to Vivendi-owned UMG suggest it may have been corporately restricted from making a hypothetical public statement on the matter until Spotify officially confirmed its intention to float on the New York Stock Exchange.

This is great news and also is the right thing to do.  The trick is, of course, that someone has to buy Universal’s position in Spotify in the public market.

Selling large blocks of shares in the public markets is always a tricky business, but Spotify may have made it exponentially more difficult given the “direct public offering” structure of its IPO (more properly called a “DPO”).  I suspect that there will be a rush for the exits as holders of Spotify stock try to liquidate, and Universal could find itself selling alongside a fully-vested marketing consultant who left the company three years ago, artists who got shares, and of course all the other majors and Merlin.

If you believe as I do that the world of retail investing is not waiting for a Spotify IPO,  this kind of robust selling could cause the price to tank in the absence of buyers or result in the kind of volume patterns you see with some shares of preferred stock (which have the “z” designation after the share numbers on the day in the stock section).

The Vivendi and Universal treasury folk are very smart people, so I’m sure they will manage the sale of their stock with an eye to avoiding tanking the stock and maximizing profit, so their interests are aligned with their artists (and presumably songwriters, too).

The next problem that we will all have to deal with is the meme that Spotify is already promoting–the reason Spotify loses money is that royalties are too damn high.  I guess that means the royalties they’re not paying?  Followed closely behind (A) the reason they can’t pay songwriters is because songwriters hide from them (true story, read the F-1 at p. 20); (B) Spotify wants to eliminate the “middleman” (i.e., record companies) and good luck with that; and (C) if the music industry had just built a global rights database then, then everything would be fine so Spotify’s failure to pay royalties is really our fault.

And especially those pesky songwriters who hide from them.

Even if it may take a while to liquidate Universal’s position in Spotify, it is comforting that they’re committed to doing the right thing.

@eriqgardner: Spotify Hit With $1.6 Billion Copyright Lawsuit Over Tom Petty, Weezer, Neil Young Songs [Music Modernization Act Fallout]

January 2, 2018 Comments off

In a curious twist, Eriq Gardner reports that the controversial Music Modernization Act has already prompted the inevitible litigation from a publisher seeking to beat the bill’s new safe harbor deadline applicable to lawsuits filed after January 1, 2018.  Wixen Pubilshing filed the new lawsuit on December 29, 2017, two years to the day after David Lowery filed the first class action against Spotify, but before the  Music Modernization Act legislation is even available on thomas.gov.

 

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The new safe harbor on p. 82 of the Music Modernization Act

 

As the new year begins, the music industry could be set for an epochal moment. Hopes are running high for the first significant reform of music licensing rules in decades. The coming year may also see Spotify go public. But before any of this happens, the Stockholm, Sweden-based streaming giant must now contend with a massive new copyright lawsuit from Wixen Music Publishing, which administers song compositions by Tom Petty, Zach De La Rocha and Tom Morello of Rage Against the Machine, The Black Keys’ Dan Auerbach, Steely Dan’s Donald Fagen, Weezer’s Rivers Cuomo, David Cassidy, Neil Young, Sonic Youth’s Kim Gordon, Stevie Nicks and many others.

On Friday, Wixen Music Publishing filed a lawsuit in California federal court that alleges that Spotify is using Petty’s “Free Fallin’,” the Doors’ “Light My Fire” and tens of thousands of other songs without a license and compensation. The plaintiff is seeking a damages award worth at least $1.6 billion plus injunctive relief.

Wixen’s lawsuit is being revealed here for the first time, but the move will come as hardly a surprise to those who have been paying attention to Spotify’s growing copyright problem….

[T]he Music Modernization Act would impact copyright holders suing over mechanical reproduction after Jan. 1, 2018, which helps explain the New Year’s Eve filing.

“We are very disappointed that these services will retroactively get a free pass for actions that were previously illegal unless we actually file suit before Jan. 1, 2018,” said Wixen president Randall Wixen in a statement to The Hollywood Reporter. “Neither we nor our clients are interested in becoming litigants, but we have been faced with a choice of forfeiting rights and damages, or taking action at this time. We regret that this otherwise admirable proposed bill has had this effect, and we hope that Spotify nonetheless comes to the table with a fair and reasonable approach to reaching a resolution with us. We are fully prepared to go as far forward in the courts as required to protect our clients’ rights.”

Read the post on The Hollywood Reporter

Read the Wixen complaint here

Read the Music Modernization Act here

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