I was fortunate to moderate an excellent panel at the SXSW Continuing Legal Education seminar this week. Our topic was “The Future of Mechanical Licensing in the U.S.” Little did we know when the panel was booked in September that this would be such a hot topic following the introduction of the deeply controversial Music Modernization Act on December 21.
One of the legal process questions the panel discussed was the MMA’s “reachback” safe harbor that retroactively limits infringement claims filed after January 1, 2018 without regard to when the MMA’s blanket license is actually available.
March 14, 2018
Hon. Robert Goodlatte
Hon. Jerrold Nadler
House Judiciary Committe
House of Representatives
Dear Chairman Goodlatte and Ranking Member Nadler,
We write to you as founders and directors of MusicAnswers, a non-profit grassroots organization now supported by more than 3,400 independent music creators across America, to express our profound concerns about the Music Modernization Act (“MMA”). We believe the current draft of the MMA completely fails in one of its primary goals: to ensure that all music creators, many of whom are independent and self-published or unpublished, are paid fairly for the use of their music by digital music services.
Instead, the MMA is being used by major music corporations to strengthen their grip over an industry undergoing an unprecedented period of fragmentation, disruption, and growth. For the Music Modernization Act to live up to its name, it must truly embrace a modern approach to streaming royalties.
A key problem the MMA purports to solve is the disposition of royalties for tens of millions of unidentified works performed by digital music services. These royalties are generally not the property of established music publishers or their writers, entities with the resources and administrative expertise to ensure they are paid for their performances. They are, instead, primarily the property of tens of thousands of writers from around the world who have chosen to bypass the established music publishing paradigms and explore new ways to get their music to market.
So it is astonishing that the “Collective,” the entity designated by the MMA to take control over the entire process of licensing these works and administering the payment of royalties, will be dominated and controlled by major music publishers — the very businesses eschewed by many of the writers concerned. This would create a significant conflict of interest that would compromise the integrity of the MMA.
We draw your attention to the following:
- The Collective established by the MMA will be controlled by the major music publishers, with a Board of Directors made up of ten publishers and four writers. There is absolutely no justification for this inequity. The Board overseeing the MMA should have equal numbers of writers and publishers, including some guaranteed representation for self-published or unpublished writers and small, independent publishers. Moreover, members of that Board should be selected by their peers, not by the major publishers or their trade associations (as has been suggested by the CEO of the publishers’ trade association.)
The MMA will create the world’s largest “black box” of unclaimed royalties, amounting to tens of millions of dollars. The process enshrined in the bill for the distribution of this money funnels it directly into the pockets of major publishers, while simultaneously creating a strong disincentive for the Collective to identify the proper owners, as this would only diminish their share of the black box. The distribution of any unclaimed money from digital music services must be accomplished in a way that ensures that the writers entitled to this money, and only those writers, share in this pool of money.
The MMA offers indemnity to digital music services on behalf of hundreds of thousands of music creators, including independent writers who have not exercised their rights under the copyright law to seek damages for prior performances and who were not consulted and did not agree to this provision. It is unconscionable that the indemnity is, in effect, being proffered by entities that have already settled their past claims. Distribution of the unclaimed funds only to writers and publishers with legitimate claims could help to alleviate this concern. In addition, a portion of unclaimed funds could be used to mount a campaign to educate independent writers about the process and benefits of filing their claims.
Absent these kinds of modifications, none of which would imperil the fragile multilateral agreement between the digital music services, performing rights organizations, songwriter groups, and music publishers, this legislation will not benefit the songwriters whose rights and royalties you seek to protect. In fact, the MMA as currently drafted establishes a framework likely to deprive legitimate songwriters of their rights and royalties for the next several decades.
We note that proponents of the bill claim to have the support of the tens of thousands of music creators. We strongly believe that few, if any, of those writers understood the details of the bill or its implications when they were asked for support. (Indeed, the bill had not even been made public when its proponents began promoting online petitions in support, nor was its text included or a link to it provided.) And with all due respect to the songwriter organizations that were involved in the negotiations of this bill, their members do not represent the worldwide community of independent music creators for whom the MMA is supposed to be a solution.
On behalf of those independent music creators, many of whom we count as friends and colleagues, we ask you to be cognizant of the forces that are at work behind the scenes and the reasons for their actions, and to carefully consider the long-term consequences of these legislative efforts.
Phil Galdston David Wolfert
cc: Member of the Committee on the Judiciary, U.S. House of Representatives
cc: Hon. Senators Alexander, Coons, Feinstein, Hatch, Leahy, and Schumer
Content Creators Coalition Highlights Ways To Improve The Music Modernization Act In Letter To Legislation Sponsors
Washington, D.C. – The Content Creators Coalition (c3) today sent the following letter to Representatives Doug Collins and Hakeem Jefferies highlighting three ways to improve the Music Modernization Act, ensuring the legislation best achieves the goal of fair treatment of independent songwriters. Additionally, the letter reiterates the performer and songwriter-run group’s support for the legislation and thanking the sponsors for their leadership in fighting for songwriters and musicians. Attached is a PDF version of the letter.
March 14, 2018
The Honorable Doug Collins, Vice Chair
Subcommittee on Courts, Intellectual Property, and the Internet
House Committee on the Judiciary
1504 Longworth House Office Building
Washington, DC 20515
The Honorable Hakeem Jeffries
1607 Longworth House Office Building
Washington, DC 20515
Dear Representatives Collins and Jeffries:
The Content Creators Coalition advocates for all music creators including songwriters. Along with other organizations spanning the music industry, we have endorsed the Music Modernization Act as part of a package of important reforms that will better the lives of people who make music for a living and strengthen the music economy overall. Thank you for your sponsorship of this vital legislation and your long-standing commitment to fair pay for songwriters and all music creators.
We recognize that the Music Modernization Act (“MMA”) is at an early stage in the legislative process – the current version is the introduced draft. Through its combination with other measures, such as the CLASSICS Act, and further Congressional process, including Committee markup, it should continue to be strengthened and improved.
To that end, we have closely followed the ongoing discussion around the introduced bill, including concerns raised by Grammy-winning composer and bandleader Maria Schneider. Many, including the National Music Publishers Association, have previously recognized the importance of her input on these issues and we too value her perspective.
We believe these concerns go to the heart of what prompted you to introduce the original Songwriters Equity Act and now the MMA. As Congressman Collins eloquently stated, the purpose of reforming outdated laws governing songwriter royalties is “[t]o incentivize (songwriters), give them the encouragement and the strength to get the songs in their spirit out to the world and to give a better future for songwriters in the music business.” Indeed, he continued, “[i]t’s the saddest thing for people not to feel they have a chance to share the song in their heart and bring it out to the world. We need to help them get it out.” This is critical, as Congressman Jeffries explained, to “nearly 80,000 songwriters, composers and publishers (in New York) who deserve to make a good living.”
We are grateful that you were moved by the need to build a better future for up and coming songwriters and every working artist struggling to make a sustainable career. That is what motivates us too and what lies behind the changes many are calling for – to strengthen the introduced draft of the MMA.
We are most focused on three core concerns about the fairness and transparency of the new structures and processes the bill puts in place: equal representation for music creators on the board, fair distribution of unclaimed royalties, and accountability and transparency for the new entities the bill creates.
The composition of the new licensing collective’s management board is the key issue. In the past, when Congress has modernized the law in this area, it has always insisted on equality between individual creators such as songwriters, vocalists, and musicians and the larger creative organizations such as publishers and record companies. Here, for the new system to work, it must remain faithful to that tradition and include equal board representation.
The bill’s impossibly complex and costly audit provisions fall short by failing to give individual creators meaningful and streamlined/affordable audit options and tools. And the unclaimed royalties process has built in conflicts of interest that will disincentivize finding royalty claimants and thereby steer money away from new and niche artists, a completely backwards approach that will only exacerbate the challenges facing the industry in sustaining its diversity, creativity, and breadth.
Those who would benefit from the bill’s current structure respond to these concerns by arguing basically that this is the way mechanical royalties have been handled in the past or in other countries and that any proposed changes are politically impossible and would endanger the passage of the bill.
These responses ring hollow. Simply because something has been done in the past does not mean that’s the only way it can be. The entire digital streaming business built atop revolutionary legislation such as the Digital Performance Right in Sound Recordings Act of 1995 is a testament to that fact. As would be the changes already contemplated by this bill, which would create two brand new entities and reshape the system for distributing mechanical royalties. There is simply no reason that Congress cannot further refine these new proposed mechanisms and make sure they are appropriately transparent, effective, and fair.
The further claim that any changes would jeopardize the bill’s passage is especially odd and circular. There is no known opposition to most of these changes except for the NMPA which benefits uniquely from the introduced version of the bill. Surely NMPA wants to continue forward on a consensus path and would not be so shortsighted as to throw away these groundbreaking reforms and major new benefits such as market value mechanical royalties and major changes to the CRB and Rate Court processes simply because it cannot have 100% of what it wants on these process/fairness questions.
c3 has been proud to work tirelessly on music licensing reform for years and specifically towards passage of these important measures, starting with our participation in the earliest hearings convened on these issues by Chairman Bob Goodlatte, carrying through with extensive member meetings and an unprecedented grassroots mobilization this year.
We strongly support your efforts and want these bills to pass. But we also urge that that the process includes full and open-minded consideration to constructive and thoughtful suggestions to improve the legislation, so it better accomplishes what you have set out to do.
Given your historic commitment to fairness for all music creators, we are confident you will do no less.
Content Creators Coalition Executive Board
Melvin Gibbs, President
John McCrea, Vice President
Tommy Manzi, Treasurer
Rosanne Cash, Vice President At Large
Tift Merritt, Vice President At Large
Matthew Montfort, Vice President At Large
cc: The Honorable Bob Goodlatte, Chair, House Judiciary Committee
The Honorable Jerry Nadler, Ranking Member, House Judiciary Committee
Spotify, Google, Amazon are all making money in Austin while they stiff Austin songwriters. Happy SXSW!
David Crosby was born the wrong year–and can’t be found by Spotify.
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 […]
[Sara Hickman is one of Austin’s most beloved songwriters. She has allowed us to republish her viral Facebook post on how streaming is hollowing out the “middle class musician”. (If you want data on this phenomenon, see the Austin Music Census, the most comprehensive work of its kind that actually connects with working musicians as opposed to the usual hoorah Chamber of Commerce bunk.) Trust me–it’s not just Austin. As Maria Schneider has written, low streaming royalty rates and increased consumption are essentially destroying the music infrastructure from the ground up. And the recurring theme from the World Trade Center offices of Spotify is that royalties are too high. We’re honored to republish Sara’s important post. And a 44% increase in streaming rates is still $0.00144.]
There were many reasons why I retired from music last year. I’ve never explained them or felt the need to, so I’m not going to start today.
But I do want to point out something that made a chilling difference in my decision. And that is streaming and downloading music versus selling physical cds/vinyl/cassettes, what have you. You’ve all heard how it affects us: the songwriters, the musicians, the bands. I want to share a living example of what streaming does. Because streaming is killing the opportunities of musicians to make a living off of their creations.
My song “I Couldn’t Help Myself” was my biggest success, in consideration of what the industry expects, it wasn’t much. But when it came out in 1990, there was a lovely video, lots of airplay, touring, promotion teams and I was flown to radio stations all over the country to perform live and chat with the DJs. All this to say hard work helped move the song to #3. I was blessed to appear on “The Tonight Show” while it was the single.
All this to lead up to the fact that it is 2018 (28 years later)
and I just received my quarterly royalty statement from Warner Music Group for all the songs from “Shortstop”. Believe it or not, my songs still get airplay around the globe, which blows my mind and, of course, makes my heart smile.
I hope you’ve read this far.
Because the pay off is you’re not going to believe what I’m about to tell you.
I recognize the numbers I’m about to share don’t amount to beans when compared with musicians who have made it to the big, BIG time. But I’ve always considered myself a working middle class musician; I worked my ass off to make a decent living and I was cool with that. I had a niche. I learned how to diversify my talents, read contracts, distribute, create and publish content (music) to support my dream. I enjoyed understanding what I was making and releasing into the world, knowing there would be end results of, hopefully, satisfied listeners and a financial reward parallel to the work, time, effort and costs associated on my end.
Having said that, I’ve watched how income numbers on royalties have dropped since streaming/downloads started.
This new earnings notice (Oct-Dec 2017) shows “I Couldn’t Help Myself” played 14,789 times (U.S., Italy, Canada, Japan, United Kingdom, United Arab Em., Belgium, etc) and here’s what that provided:
FIFTEEN DOLLARS AND NINETY EIGHT CENTS for 14,789 captured results of people listening to my song.
That equals .0010 per download or stream. It’s not even
a PENNY per play. And it’s not because it’s me. That’s the level playing field of payment for all of us in music on Spotify, YouTube, Amazon download, Apple iTunes, Google Play, Tidal, Rhapsody, Slacker…even something called Neurotic Media.
Let me hip you to how many of those were downloads (as in paid for content):
Here’s how much streaming this one song of mine received:
As today is the International Day of Women, I thought it was important to remind you of not only how women musicians are treated, but how ALL musicians are compensated and WHY it is IMPORTANT to remember to pay for music.
Video may have killed the radio star, but streaming is ending wages and opportunities for your creators.