Unlike most countries, terrestrial radio in the U.S. is not required to pay a performance royalty on the music it plays, a situation that the creator community has long railed against, and the commercial radio community has long worked to protect. Below, recording artist-actor Common and SoundExchange President/CEO Michael Huppe weigh in on the situation. Variety welcomes responsible commentary — contact firstname.lastname@example.org with submissions.
As Civil Rights icon and actor-singer Paul Robeson once said, “Artists are the gatekeepers of truth. We are civilization’s radical voice.” Artists are society’s moral compass and it is our moral obligation to provide them with fair and just payment for their original creations.
Eric Harvey has a great must-read article in Pitchfork about what he describes as “Music Twitter” (“How Twitter Changed Music“). Mr. Harvey makes that case that Twitter was designed with both music and the music business in mind. That is certainly true. Twitter couldn’t be a more perfect way for pop and rap stars to connect with their fans and introduce new music. If willing to put in the time (aka free labor for Twitter), artists from any genre can find it useful. Unbelievable numbers of recordings are promoted, linked, streamed and talked about on Twitter.
Mr. Harvey makes a point that many of us probably didn’t know:
When Twitter was dreamed up, in fact, it was with music in mind. “This is why we built this thing! For concerts and music shows!” Noah Glass told fellow co-founder Jack Dorsey in 2006, according to Nick Bilton’s book, Hatching Twitter. At that point, when the site had only a handful of users, Glass and Dorsey road-tested Twitter at Coachella and attempted a partnership with the 2007 VMAs. As the site grew in popularity, Bilton recounts, pop stars made pilgrimages to the company’s modest San Francisco headquarters, like when a couple of Twitter engineers “found a member of the band blink-182, half-asleep and half-drunk, pouring a small bottle of gin into a bowl of Fruity Pebbles cereal, then chowing down on breakfast.”
But after you read the post, I think you may realize that there’s a dog that didn’t bark–despite the fact that some of Jack Dorsey’s best friends may be musicians, Twitter has consistently refused to even accept the premise that the site needs licenses and should pay royalties. However “intertwined” Twitter may be with the music business, the company steadfastly refuses to acknowledge that value by respecting business of the artists, songwriters, producers, musicians and vocalists who drive what Mr. Harvey shows pretty conclusively is a big chunk of Twitter’s value.
Mr. Harvey dives into the many connections between the company’s founders who designed their product to free ride on the artists they claim to admire. It is clear that Twitter owes a lot of its success to the star making machinery behind the popular song:
Judging by the numbers alone, Twitter is more deeply intertwined with music than any other industry. Four of the top five—and half of the top 20—most-followed Twitter accounts are solo musicians. More than movie stars or major athletes, whose work is more obviously collaborative and done according to others’ scripts, the pop star/fan relationship maximizes what Twitter does best, fostering emotional connections rooted in the personal authenticity of a single, spectacular figure. This has led to an environment where millions of Twitter users are there purely to serve as foot soldiers in their idol’s digital army, and where the tantalizing (or mortifying) possibility of direct contact is always present.
Maybe it’s time that Twitter did the right thing and stopped abusing the absurdly outdated DMCA safe harbor game of whack a mole. Please let’s not be told that Twitter’s value is exposure or that data is worth having your rights ignored. Data may be the new exposure, but you do have to ask how do people like Jack Dorsey sleep at night.
We’re all well aware of how Google uses self-manufactured loopholes in the DMCA safe harbor to enrich itself at the expense of artists, and run their loophole traps while appearing to “help” artists deal with the Google manufactured whackamole on YouTube with “tools” like Content ID. (See Ellen Seidler’s teaching on this subject, Kerry Muzzey’s post about Content ID from an artist perspective, and Zoe Keating’s statements on the YouTube Content ID shakedown.)
What Google has also done is find someone out there who is willing to promote the corporate line on DMCA abuse, the Chief Loophole. This person very likely gets paid a fortune in both cash and stock options to be the public face of Google’s destructive policies. Or at least a fortune compared to the person’s former colleagues in the copyright category that Google is commoditizing and extracting value from with their loophole seeking behavior.
Google then spends money on a charm offensive directed at these former colleagues—but which falls short of providing the same wealth that they bestowed on the Chief Loophole. They may have many reasons for keeping this class distinction in play, but the message is clear—if you truly go over to the dark side, beaucoup bucks await you. Or it will seem like beaucoup bucks to you because Google’s loophole seeking beat you down so far it looks like up to you.
Yes, I’m describing Lyor Cohen at YouTube and Richard Gingras at Google’s Internet of Other People’s News. Rather than embrace a rights-affirming and privacy-protecting philosophy, these two divisional Chief Loopholers shore up two of the principal sources of Google’s data wealth—news and music.
Lyor Cohen embarrassed himself to little effect as the face of YouTube’s assault on the European Copyright Directive. Mr. Gingras is doing the same in what promises to be the opening act of a long offensive against the European Copyright Directive.
The Copyright Directive has been passed by a vote of the European Parliament and transposed into French law by a vote of the Parliament of France—which the multinational Big Tech bloc like Google lost abysmally by employing a bot strategy that seemed to be modeled on the tactics of the Internet Research Agency as discovered by several European newspapers including the London Times.
The crux of the issue for Mr. Gingras is that the Copyright Directive requires Google to pay a neighbouring rights royalty to newspapers whose work they use. You may have heard the Google Alinsky-style semantical talking point of the “link tax”.
Google is now putting Mr. Gingras forward to be the Lyor-style face of its campaign against journalists and news organizations in France by throwing a new loophole in the face of the French government while at the same time stepping up its charm offensive by offering what certainly look like bribes to news organizations in Europe that play ball.
The loophole is Google’s use of its brutal market power to force newspapers to give them for free that which would otherwise attract essentially a statutory royalty. Mr. Gingras is the face of this, a role for which we hope he’s being at least as well compensated as Lyor Cohen for doing what is effectively the same job—being the face of the charlatan. The good news is that Google tipped their hand early in the transposition process so even France can go back and fix this competition law violation.
Thanks to the Google Transparency Project (full report here) we know that Mr. Gingras also brings a pot of gold to his version of the rainbow, either directly or indirectly, through spending on the ideation and flaring from the shill incubator:
The Google Transparency Project undertook the most comprehensive effort yet to collect all of Google’s payments to media organizations around the world in one place. The analysis included 16 different Google programs and related organizations and spanned more than a decade.
It revealed that Google and related entities have committed between $567 million and $569 million to support at least 1,157 media projects around the globe. The analysis also identified another 170 projects supported by Google for which no funding information was publicly available, suggesting that the total amount the company has spent on media grants is likely far higher.
Google often boasts about its support for journalism, disclosing plans to spend over half a billion dollars on media initiatives since 2013. But Google isn’t always transparent about its spending, making it difficult to assess what the company is giving—and what it may be getting in return.
We haven’t seen Mr. Cohen waiving around this kind of cash aside from a few thousand euro we know about that was paid to some YouTube “creators” to produce anti-copyright directive materials.
Lyor really needs to do something about that disparity. We’re way beyond YouTube “creator” studios now—user-generated never got hundreds of millions. I wonder what Mr. Gingras makes by comparison to Mr. Cohen?
Over more than a decade, Google and foundations run by its leaders have given hundreds of millions of dollars to journalists and news organizations around the world, sponsoring drones in Nigeria and Kenya, and local news in the US. But according to a new report, these grants tend to be made in places where the company faces pressure from politicians, the public, and the press, raising questions about whether the tech giant is committed to social good or buying itself goodwill.
The report, written by researchers at the Campaign for Accountability’s Google Transparency Project, shows a spike in funding in Europe when Google was under pressure in the mid- to late-2010s, and a subsequent uptick in the US amid a backlash that’s led to a Department of Justice investigation and calls for its breakup.
The first time I met with the French Minister of Culture, we met at their offices at the historic Palais-Royal complex which is also home to the Comédie-Française, the oldest active theater group in the world (founded in 1630). The French take their culture very seriously. One would do well to remember that in your dealings with them.
But of course, Google doesn’t give a rip about France, culture, French culture or the French Minister of Culture. And as predicted, Google are refusing to comply with the new European Copyright Directive as transposed into French law. (Once passed by the European Parliament, the Directive must be implemented at the nation state level–Google has no time for the nation state, either. The law goes into effect in France on October 24.)
Having suffered a spectacular loss in the European Parliament, the American multinational Internet company is now going to bring Silicon Valley justice to France.
Google said Wednesday it will not pay European media outlets for using their articles, pictures and videos in its searches in France, in a move that will undercut a new EU copyright law.
The tech giant said it would only display content in its search engine results and on Google News from media groups who had given their permission for it to be used for free.
The announcement, which will result in free content gaining higher visibility, comes after France became the first EU country to adopt the bloc’s wide-ranging copyright reform in July….Google had warned after the European Parliament vote that the change would “lead to legal uncertainty and will hurt Europe’s creative and digital economies.”
Of course what Google meant was that Google will do everything Google can to hurt Europe’s digital and creative communities because they’re pissed. Make no mistake, it’s not Google’s compliance with the law that is producing harm in France, it is Google’s refusal to comply that does so.
French President Macron made the country’s position clear:
“A company, even a very large company, cannot get away with it when it decides to operate in France,” the French president insisted, during a visit to mark the centenary of the La Montagne newspaper in the city of Clermont-Ferrand in central France.
“We are going to start implementing the law,” he said.
According to Emmanuel Legrand’s excellent newsletter, Google is refusing to pay French news publishers for free-riding on their expensive news when delivered in Google’s massive monopoly on news aka search results:
French minister of culture Franck Riester was particularly incensed by Google’s decision. “I met with the head of Google News [Richard Gingras] this morning at the Ministry of Culture,” said Riester to journalists on the day Google made its decision public. “I sent him a very strong message about the need to build win-win partnerships with publishers and news agencies and journalists. The answer he gave me a few minutes later was stonewalling. This is unacceptable.”
Apparently this philistine from Silicon Valley not only has no respect for the law or the democratic process, he also has no respect for French culture. Be clear on this–the French law was passed in the European Parliament over Google’s unprecedented astroturf lobbying campaign AND it was passed at the national parliament IN FRANCE. The people were heard TWICE.
And if Mr. Gingras wasn’t insulting enough to Europeans and the French people from his cozy option-packed Silicon Valley enclave, he sure doesn’t know how to handle himself with the French minister of culture. Here’s a hot tip–the Peter Pan thing is not a good look outside the Googleplex paedocracy.
But understand this–as I predicted, Google has no intention of complying with the Copyright Directive and will dump as much money as it takes in legal fees, PR campaigns, fake news and astroturf until it has exhausted all possible claims, trials, appeals, lobbying, the works. Why?
Because THEY LOST AND THEY ARE PISSED. What you are about to see play out is what happens when the richest and most powerful media company in commercial history strikes back. What happens when the Silicon Valley company with control over the world’s newspapers says a people should know when they’re conquered. No blow is too low. And I keep saying, there’s only one thing they understand which is not fines. You can’t get fines big enough to hurt them.
What gets their attention is anything that affects their behavior–and that means injunctions or prison. They have no appreciation for anything we do to create music, movies, news, photographs, illustrations or any other work of authorship. For them, it’s there for the taking.
In a prescient 2008 book review (entitled “Google the Destroyer“) of Nicholas Carr’s The Google Enigma, antitrust scholar Jim DeLong gives an elegant explanation of Google’s thuggish behavior:
Carr’s Google Enigma made a familiar business strategy point: companies that provide one component of a system love to commoditize the other components, the complements to their own products, because that leaves more of the value of the total stack available for the commoditizer….Carr noted that Google is unusual because of the large number of products and services that can be complements to the search function, including basic production of content and its distribution, along with anything else that can be used to gather eyeballs for advertising. Google’s incentives to reduce the costs of complements so as to harvest more eyeballs to view advertising are immense….This point is indeed true, and so is an additional point. In most circumstances, the commoditizer’s goal is restrained by knowledge that enough money must be left in the system to support the creation of the complements….
Google is in a different position. Its major complements already exist, and it need not worry in the short term about continuing the flow. For content, we have decades of music and movies that can be digitized and then distributed, with advertising attached. A wealth of other works await digitizing – [news,] books, maps, visual arts, and so on. If these run out, Google and other Internet companies have hit on the concept of user-generated content and social networks, in which the users are sold to each other, with yet more advertising attached.
So, on the whole, Google can continue to do well even if leaves providers of is complements gasping like fish on a beach.
What you’re seeing in France is the onset of gasping.
Åsk Wäppling is a warrior in the midst of a legal battle to preserve 20 years of her digital work. Thanks to the Digital Millennium Copyright Act and the lawyers who misuse it to intimidate everyday citizens, Adland.tv is now offline.
DMCA criminalizes production and dissemination of technology, devices, or services intended to circumvent measures that control access to copyrighted works (commonly known as digital rights management or DRM). It may have been well-intended when it was written, but in reality, the 1998 law is a bludgeon from another time.
The story of Adland’s takedown is stupid and grossly unfair. I appreciate Åsk, a.k.a. “dabitch” taking time to explain what happened to Adland. As she seeks a legal resolution, I’m inclined to ask what the extremely rich and powerful ad community can do to help her. Also, what can be learned from this case, so it doesn’t continue to happen?
UPDATE: This post originally appeared on 9/24 in MusicTech.Solutions before reading that on 9/23 Wells Fargo initiated coverage of Spotify at “Underperform” with a $115 price target. (The stock touched $115 during the trading day on 9/24). As of this writing, the consensus price target is $159 according to NASDAQ’s Marketbeat. And of course, streaming’s massive consumption of electricity is becoming an issue faster than you can say “data center.”
Analyst Mark Hake has developed three different scenarios for where Spotify’s stock price will be in 2021: $125.68, $61.42 and $38.39. He assigns a $114.89 price based on a probability analysis. About where it is at the close today, in other words. His post in Seeking Alpha (“Spotify Has A Valuation Problem”) is a must read if you’re interested in financial analysis. (I predicted about a year ago the stock would retrace to the $120 to $130 range before dropping below $100 and that it would happen sooner than later.)
As analyst BNK Invest noted after the close last Friday (9/20):
In trading on Friday, shares of Spotify Technology SA (Symbol: SPOT) entered into oversold territory, hitting an RSI reading of 26.8, after changing hands as low as $120.63 per share. By comparison, the current RSI reading of the S&P 500 ETF (SPY) is 56.4. A bullish investor could look at SPOT’s 26.8 RSI reading today as a sign that the recent heavy selling is in the process of exhausting itself, and begin to look for entry point opportunities on the buy side.
This chart is from today’s trading and it reveals a couple interesting patterns–they may mean nothing, but then again they might. It’s not so much that Spotify is now trading about $20 below its self-assigned private company valuation of $135. That’s not a comfortable feeling as it says that investors would have been $20 a share better off if the company had never had its controversial direct public offering (or “DPO”) and just stayed private.
What’s interesting about this chart is not so much the price but rather the volume. Spotify is a very thinly traded stock that typically has relatively low volume. When you see larger volume around the opening and the close of trading it may indicate certain motivations of sellers. Particularly if there are holders of large blocks of shares that want to slip out of their position when nobody is (a) noticing or (b) can do much about it.
Because of the nature and “rules” of the DPO, Spotify doesn’t have the typical underwriting syndicate that helps to keep the price somewhat stable to allow the stock to establish a trading range with support levels. Instead of the underwriters selling to the public, Spotify insiders are selling their shares to the public, which then of course can be resold. In an underwritten public offering, insider shares are usually subject to a “lock up” period where insiders cannot sell their shares for a period of time, say 90 to 180 days after the first public offering.
Spotify had no lock up on insiders. So who has an incentive to sell their shares relatively quickly?
It’s hard to know who is doing the selling unless you’re a transfer agent with access to the master shareholder list, and they probably wouldn’t disclose that information for anyone under certain thresholds. But it is odd and it’s been similar patterns for a week or so.