@CopyrightOffice Suspends Statutory Royalty Payments and Creates a @HarryFoxAgency “No Pay” List

You may have missed this April 6 email from the Copyright Office which conveys another huge benefit on Big Tech while potentially destroying songwriters, especially independent songwriters.  Note also the HFA appears to have been in on it from the beginning.  If you got a notice on this from HFA or from MLC, please leave a comment.  The much vaunted CARE Act authorizes the Copyright Office to unilaterally make these rulings in the same section (the new 17 U.S.C. Section 710) that allows them the power to change the “license availability date” when the MLC is to start operating.

Just in time for both the the March and the first quarter mechanical royalty distribution, the goal posts are moving.  A service that sends paper statements can essentially opt out of paying royalties as long as they certify they are “unable” to pay royalties.  Just like songwriters can opt out of paying for groceries, utilities or rent by certifying they are unable to pay.

Note that it’s not clear if the service has to use the pure statutory license or if this new rule applies to paper statements for direct licenses that render NOIs, statements of account or royalty payments on a quarterly basis instead of the statutory monthly payments.  Just that the statements be on paper.  The notice says it doesn’t apply to direct licenses, but it isn’t clear if those direct licenses require paper statements.  The fact that the new rule may not apply to direct licenses is hardly something to be proud of–direct licenses are always the major publishers who sign the biggest songwriters.

It’s unclear just how many paper statements are involved, but there must be quite a few or the Copyright Office would not have adopted this obscene rule.  All you need to do is check with HFA to see if your songs are on the “no pay” list.

While the royalty payment is still required, the actual payment is tolled for paper statements essentially for as long as the emergency continues.  So good news, songwriters, in the long run you get paid.  But as John Maynard Keynes said, in the long run we’re all dead, too.

They do say that the nonpaying service is supposed to arrange for an opt in for electronic payment.  Oh, that will go just smooth as glass.

This reeks.  It sounds like HFA decided they didn’t want to pay the long tail.  And if they don’t have to send you a statement, how will you ever know what you should have been paid.

So if they can’t pay royalties and then go bankrupt, then what happens?  We’re sure that someone has a nice crisp answer for that obvious eventuality.

NOT.

April 6, 2020

Emergency Relief for Section 115 Paper Processes During COVID-19 Pandemic

The U.S. Copyright Office has become aware that some entities may not be able to provide paper Notices of Inquiry (NOIs), Statements of Account (SOAs), and, potentially, associated royalty payments under section 115 of the Copyright Act because the COVID-19 pandemic has prevented them from physical processing. To address this issue, subject to section 710 of the Copyright Act [the new Section 710 under the CARES Act], the Office is temporarily adjusting certain timing provisions so the requirement to provide NOIs, SOAs, and royalty payments is tolled during the period of disruption caused by the pandemic. This timing adjustment also requires entities to provide copyright owners with certain information, including a certification that the entity is unable to process paper materials and contact information on how to temporarily opt in to electronic delivery of materials. This adjustment is available only during the period of disruption caused by the COVID-19 pandemic. For details of the temporary adjustment, including specific instructions on how to use it, please see the Office’s Coronavirus page.

The Copyright Office Public Information Office is available for questions through our website at copyright.gov/help/ or at (202) 707-3000 or 1-877-476-0778 (toll free).

For more information on COVID-19 generally, please visit: coronavirus.govCDC.gov/coronavirus, and USA.gov/coronavirus.

This is the linked explanatory text:

Timing Requirements for Serving Section 115 Notices of Intention and Statements of Account

Under section 115 of the Copyright Act, a compulsory license to make and distribute phonorecords of a musical work is currently available under certain conditions, including service of a notice of intention (NOI) upon the copyright owner and delivering a monthly statement of account (SOA) and royalty payment to that owner. The Orrin G. Hatch—Bob Goodlatte Music Modernization Act (MMA) made significant changes to the section 115 license. This includes distinguishing obligations for serving an NOI depending upon whether or not the use involves a digital phonorecord delivery (e.g., whether the use is related to a physical product such as a vinyl record or CD, or whether it relates to use on a digital music service). But for both types of uses, users must currently: (1) serve NOIs before, or not later than thirty calendar days after, making a phonorecord of the musical work; (2) provide SOAs and related royalty payments on or before the twentieth day of each month, which shall include all royalties for the month next preceding; and (3) also provide an annual SOA.

The Copyright Office has issued regulations related to the format and service of NOIs, SOAs and related royalty payments. By regulation, SOAs and payments may be sent together or separately, but if sent separately, the payments must include information reasonably sufficient to allow the payee to match them to the corresponding statements. Copyright owners may elect to receive NOIs, SOAs, or payments in paper or electronic format (e.g., by email or electronic account, and direct deposit), but the default rule is paper delivery. In practice, the Office understands that a majority of copyright owners have generally elected electronic delivery, but a minority receive NOIs, SOAs and payments by paper, either because they simply have not opted into electronic delivery, or, for a smaller minority, because they have affirmatively expressed a preference for paper.

While the MMA’s most significant change is to establish a new, blanket license for digital music providers (DMPs) to be administered by a mechanical licensing collective (MLC), this blanket license is not yet available. DMPs and other licensees must continue to comply with section 115’s conditions on a song-by-song basis during the current transition period. The emergency relief outlined below is directed at obligations accruing during this transition period and is unrelated to activities of the MLC. This relief is also necessarily limited to obligations related to the statutory section 115 license and is unrelated to obligations that stem from direct licensing agreements between private parties.

The Copyright Office has become aware that, as a result of the COVID-19 national emergency, some entities, including at least one DMP and its licensing administrator, may be prevented from serving NOIs and SOAs in a timely manner due to an inability to physically process paper notices and statements resulting from a shutdown of corporate offices. In the instance that has come to the Office’s attention, the Office also understands that processing of paper checks originates from a different location and remains unaffected.

To mitigate the effect of disruption upon all stakeholders of the section 115 license, including licensees, music publishers, and songwriters, the Acting Register is temporarily adjusting the application of certain timing provisions. Recognizing that the section 115 license reflects a complex balancing of interests most recently addressed by Congress through passage of the MMA and the existing reliance upon the current structure by various stakeholders, the Office is providing a reasonable framework for relief that minimizes disruption to longstanding expectations, including with respect to royalty payments, and promotes transparency in compulsory licensing. These adjustments will apply as follows:

  • Notices of Intention: The requirement that a NOI be served will be tolled during the period of disruption if the affected entity (1) has sent an alert to the copyright owner (directly or through respective administrators) that it is unable to serve the NOI by paper and provided clear instructions and contact information for the owner to temporarily opt-into electronic delivery during the period of disruptions in the alert and on a website of the licensee or its licensing administrator; (2) serves the notice within thirty days after the date the disruption has ended, as stated in a public announcement by the Acting Register, along with a clear statement indicating the date or expected date of distribution; and (3) complies with the general conditions outlined below. The alert in subpart (1) of this paragraph may be made by a licensing administrator and will be considered satisfied if the related certifications include a description explaining that an alert was attempted but unsuccessful due to lack of electronic contact information or a lack of ability to deliver an alert stemming from the disruption.

  • Statements of Account and Royalty Payments: The requirement that a monthly or annual SOA be served or royalty payment made will be tolled during the period of disruption if the affected entity (1) has sent an alert to the copyright owner (directly or through respective administrators) that it is unable to serve the SOA by paper and provided clear instructions and contact information for the owner to temporarily opt into electronic delivery during the period of disruptions in the alert and on a website of the licensee or its licensing administrator; (2) serves the SOA within thirty days after the date the disruption has ended, along with a clear statement indicating the period (month and year) covered by the applicable statement; (3) complies with the general conditions outlined below; and (4) continues to make timely payment of royalties to payees, whether electronically or by paper check, unless the certification includes a statement and supporting evidence describing the inability to make the required royalty payments. The alert in subpart (1) of this paragraph may be made by a licensing administrator and will be considered satisfied if the related certifications includes a description explaining that an alert was attempted but unsuccessful due to lack of electronic contact information or a lack of ability to deliver an alert stemming from the disruption.

  • General Conditions:

    • Certification: An entity making use of this adjustment must include a declaration or similar statement on each applicable NOI or SOA certifying, under penalty of perjury, that the entity would have served the NOI or SOA, or made the royalty payment, within the statutorily prescribed time but for the national emergency, and setting forth satisfactory evidence in support of that statement. Satisfactory evidence would include, but not be limited to, a statement that the licensee and, if applicable, its vendor was prevented from mailing the required physical materials or payment, alerted or attempted to alert the copyright owner of the ability to opt into electronic delivery, and were unable to obtain consent from the copyright owner to receive materials or payment electronically.

    • Limitation to Paper-Based Delivery: As of April 6, 2020, this adjustment applies only to NOIs and SOAs sent to persons or entities who had previously received them in paper format prior to the national emergency. An entity with a demonstrated need to extend this adjustment to electronic delivery methods should contact the Copyright Office using the information provided below.

    • Contact Information: Entities making use of this adjustment must make contact information and customer service accessible for persons, including copyright owners, who wish to understand how this tolling may affect them, including to opt into a temporary offer of electronic delivery or determine whether their interests are included in the list of affected works and licenses described below. Although the Copyright Office typically does not link to third parties, in light of this emergency relief and the importance of copyright owners obtaining reliable information, the Office is sharing the following contact information: ClientServices@harryfox.com; www.harryfox.com/#/hfa-account/register [This is a link to register with HFA for publishers]. Affected entities who wish to be added to this list should contact the Office using the information provided below.

    • Temporary Offer of Electronic Delivery: Entities making use of this adjustment must promptly provide a method for copyright owners who were receiving paper NOIs or SOAs prior to the national emergency to opt in, on a temporary basis, to electronic delivery and, separately, to direct deposit of payments. Such deliveries and deposits must automatically revert to a paper format within thirty days after the date the disruption ends, unless the copyright owner has agreed to continued electronic delivery.

    • List of Affected Works and Licenses: Entities making use of this adjustment must track how they use it and must maintain a record of licenses by copyright owner for which they have made use of the adjusted timing provisions. They must also keep a list of the affected musical works. Over time, the Office expects the list of licenses with respect to the number of copyright owners to remain the same, or decrease, as copyright owners opt-into electronic delivery, while the list of affected works may increase as new sound recordings continue to be released.

    • Licensee-Vendor Royalty Delivery: As applicable, an affected DMP or other user must continue to deliver royalty payments to its chosen administrator, so that the administrator may promptly make royalty payments when and where possible.

    • Due Diligence: Except for the adjustments provided under this emergency authority, the due diligence requirements of section 115(d)(10) remain unaltered.

[ARW readers are familiar with the excellent work of Hugh Stephens and this post is no exception.  Mr. Stephens calls attention to the pincer attack on creators by the forces of evil  that sure bear a striking resemblance to the anti-artist yearnings of a certain ginormous advertising company based in Mountain View.]

 

As I write we are in the depths of the COVID pandemic. Each day brings new and more frightening predictions of what is to come, what we all need to do to “bend the curve”, and how it is affecting people globally from both a health and economic perspective. The pandemic is a once-in-a-lifetime challenge….

[I]t is extremely disappointing to see special interest groups taking advantage of the COVID crisis to push their personal pre-COVID agendas. In the case of copyright, this consists of using the crisis to attack the fundamentals of copyright protection, namely the right of creators to control distribution of their work, and thereby to earn a return on the sweat equity they put into the creation in the first place.

In the case of copyright, the first shot was fired by the Internet Archive which declared that it would make its collection of 1.4 million copyright-protected books freely available through its online Open Library, using the COVID pandemic as the pretext. The Open Library’s self-professed goal is to make all works ever published available in digital format. To do this, it scans any works it can get its hands on, and inventories them in its digital library. While it has over 2.5 million public domain works in its catalogue, it is not too particular as to whether a work is in copyright or not; it’s all grist to the Open Library’s mill.

Read the post on Hugh Stevens’ blog: COVID is Not an Excuse to Throw the Accepted Rules Out the Window: Copyright as the Canary in the Coalmine. — Hugh Stephens Blog

Superpowers In River City: Anti-Artist Activist Brewster Kahle’s Revealing “National Emergency Library,” the Faux Triumph of Privilege

If you’ve ever seen the classic musical The Music Man, you will remember the stereotypical character of “Marian the Librarian” who was romanced by the grifter Harold Hill.  When it comes to the Internet Archive, we’re way past Marian but we have a whole new character in the role of grifter.

Brewster Kahle is not likely a name you recognize.  But he is definitely well-known to the digital elites–which we know because his picture shows up in the 2000 version of the Billionaire’s Dinner rubbing elbows with the cognoscenti including fellow diners Nicholas Negroponte of MIT and MIT patron Jeffrey Epstein. Somewhere along the line Mr. Kahle seems to have gotten very rich or perhaps richer still.  And he also founded Alexa and the Internet Archive which is our focus in this post because of the Archive’s announced “National Emergency Library.”  We’ll come to that effort presently, but first let’s consider Mr. Kahle’s history in the copyright context.

A Man With A Mission Meets A Dandy on the White Horse

Mr. Kahle was and is a man with a mission in the mold of his fellow pirate utopian and EFF founder, John Perry Barlow.  Less flamboyant to be sure, but cut from the same anti-copyright cloth Mr. Kahle has attracted literally the same crew of Lost Cause dead enders.  These dots will be very familiar.  It’s all very Googlely and Mr. Kahle has shown himself to be as close to Google’s mission as one is to two.  Whether revolutionary leader or useful idiot, Mr. Kahle has proven his value to Google again and again over some two decades.

Copyright students may remember Mr. Kahle from 2006 as the plaintiff in Kahle v. Gonzales, one of the cases where Lessig did a brilliant job of making the predictably losing argument as an extension of yet another losing argument from Lessig’s cherished Eldred case.  (Has Lessig ever won anything that Google didn’t pay for?)

Mr. Kahle challenged the Copyright Renewal Act of 1992 that eliminated once and for all the renewal requirement from the U.S. 1909 Copyright Act that was held over in the 1976 Copyright Act for certain registrations.  (Lessig was joined as co-counsel in the Kahle case by his protege Professor Christopher SprigmanSprigman is a leading anti-artist zealot.  He currently represents Spotify in the Nashville cases and is leading the American Law Institute’s embarrassing and scandalous “Restatement of Copyright” trojan horse campaign that has been thoroughly discredited.)

Kahle, Lessig and Sprigman essentially argued then and now for a renewal requirement to make copyright renewals an opt-in system rather than an opt-out system.  That meant that authors would have to take an affirmative act to renew their copyrights after an initial term.  As Lessig writes back in 2003, “The revival of a registration requirement would move content into a public domain quickly….There are many who have written brilliantly about what is right in this context….But the hard problem is how to make the right real. That is what this movement needs now.

You get the idea.  The Lost Cause is born.  And Kahle was apparently only too happy to finance “the movement” with a younger Lessig imagining himself on a white horse leading the mob.  Younger but just as much the tiresomely self-righteous Google fan boy and thin-skinned ideological dandy.  Because the Lost Cause was “right”.  Beware men on white horses waiving the privilege of “what is right” backed by the superpower billionaire boys club.

It must be said that a creator’s failure to comply with Mr. Kahle’s new formalities of registration and renewal (unique to America, by the way) would allow the Big Tech superpower benefactors of Lessig, Sprigman and Kahle.  Like superpower privilege that induced a mass taking by the National Emergency Library, Big Tech superpowers could exploit those unrenewed copyrights without a license or payment to the authors, also known as the public domain, public knowledge, or any of the other shibboleths that mask the very traps for the unwary that Congress wanted to prevent in the 1992 legislation.  (In another proof of the Lost Cause, Kahle’s lawyer Professor Sprigman was  later a member of Pamela Samuelson’s “Copyright Principles” project and co-authored its paper that also advocated for the very registration requirement that they resoundingly lost in the Kahle case (see Sec. IIIA of paper, “Reinvigorating Copyright Registration”.)

For those reading along at home, procedurally the odd and rather desperate signpost of the Kahle case was that Lessig largely based Kahle on Eldred which he lost in the Supreme Court.  When Kahle got to the 9th Circuit, this oddity was not lost on the judges who held–in possibly the least suspenseful ruling of the decade–that “[Lessig, Sprigman and Kahle] make essentially the same argument [in Kahle], in different form, that the Supreme Court rejected in Eldred. It fails here as well.”

Kaboom.

So Kahle got into trouble at 9th Circuit.  As Harold Hill might warble, that’s trouble with a T that rhymes with P and that stands for “phool.”

Kahle’s Lost Cause and the National Emergency Library’s Fair Use Superpower Privilege

Yet despite continued losses, re-imposing a copyright registration requirement has become the Lost Cause of the anti-artist crowd.  Not only has Lessig pushed this hustle, but its proponents include Pamela Samuelson and Christopher Sprigman, so we can only assume that the controversial “Restatement of Copyright” promoted by Samuelson and written by Sprigman will no doubt devote some ink to this topic.  Indeed, we saw Samuelson raise registration in her most recent testimony in a bizarre hearing before the Senate IP Subcommittee.

And we also see a version of it in the Internet Archive’s absurdly transparent lawlessness masquerading as fair use with its “National Emergency Library” which takes post-disaster profiteering to a whole new level.

In a nutshell, the Internet Archive is seizing upon the COVID19 global crisis to make digital copies of books of dubious provenance available for free.  They managed to get a bunch of libraries to sign a letter saying how groovy the Internet Archive is for graciously aiding the world–if this sounds familiar, it is very reminiscent of the Google Books messaging as the “digital library of Alexandria” and other drivel.  (See the timeless Google and the Myth of Universal Knowledge:  A view from Europe by Jean-Noël Jeanneney, then president of France’s Bibliothèque Nationale.)

As someone who grew up with both hurricanes and earthquakes, I have a viscerally embedded disgust for those grifters who exploit human misery for their own private agenda, be it profiting in cash or distorting the fair use defense beyond recognition to confer a cash equivalent benefit.  Both are equally loathsome forms of looting and under the circumstances may well be a form of price gouging.  If proven, that’s a crime in most states.  Indeed, if imposed by state authority, such as a state library, it may well be found to be an impermissible form of eminent domain, or a taking.  There’s that word again.

The National Emergency Library:  Leap of Faith or Superpower Privilege?

What makes a casual interest into a full-blown negationist Lost Cause ideology is the leap of faith that the dead ender’s ill conceived campaign was actually “right” all along.  (A healthy rasher of narcissism is also a nice-to-have.)  You know, defending consumer rights against the aggression of copyright maximalists.  You see, it was only the privileged Bad People conspiring against them that gypped the Good People of the victory to which they were entitled.  In fact, Mr. Kahle says as much in the Internet Archive blog announcing the “National Emergency Library”:

“The library system, because of our national emergency, is coming to aid those that are forced to learn at home, ” said Brewster Kahle, Digital Librarian of the Internet Archive. “This was our dream for the original Internet coming to life: the Library at everyone’s fingertips.”

And there it is, the Lost Cause defined.  The indefinite “our”.  Who exactly is “our” or “us”?  The Good People.  The Right People.  The movement people.  Whose superpowers you oppose at  your peril you others.  You authors.  Because “our” national emergency justifies “our” fulfillment of “our dream.”

The Good People share that “dream” of “ours” as we are told in the Archive’s blog post cum press release:

“Ubiquitous access to open digital content has long been an important goal for MIT and MIT Libraries. Learning and research depend on it,” said Chris Bourg, Director of MIT Libraries.

Ah yes, MIT’s goal must be extra groovy, right?  I’m sure Joi Ito (of Creative Commons fame among other rewards) thought so when he was taking Jeffrey Epstein’s money with MIT’s blessings.

What bunk.

The Googley Expansion of the Fair Use Superpower as Eminent Domain Taking

And of course the central rationale for why the Archive could rip off over a million books is…wait for it…fair use.  But a very super duper version of fair use that you may not have encountered before.  This is a super duper opinion shared by 300 or so librarians, many of whom appear to be employed by state-owned libraries.  They signed a letter promoted by the Internet Archive that puts their taxpayer subsidized employment right on the line.

You have to take a step back and look at the National Emergency Library in the larger context of the continued distortion of fair use by Google and its cronies as we recently argued in an amicus brief supporting Oracle in Google v. Oracle, the long-running copyright case now pending before the Supreme Court that is straight out of Bleak House.

Unfortunately, like the DMCA, Section 230 and so many other grotesquely unfair benefits that Big Tech superpowers grasp for themselves, the only way to fight back in the chaos of the current pandemic is to literally fight back.  Big Tech’s superpower billionaires are doing just fine as authors struggle even more than before the time of the virus.  But these people are more than willing to capitalize on the current crisis to distort copyright exceptions like fair use, just like Google is forcing users of its Verily coronavirus test to open a Google account and give up their health data.

I for one find it very odd that 300 or so librarians could all agree in a matter of hours on a complex legal opinion regarding expanding the contours of fair use–unless that opinion were written for them by someone they already knew.  Such as their lobbyist, for example.   Maybe not, but it does seem it’s something that state Attorneys General should look into as it applies to their librarians.  Assuming that signing up for the scheme is not simply aspirational and they are all actually participating in the cabal, these librarians are incurring liabilities for their employers and quite possibly the taxpayer.  If state libraries are indemnifying the Internet Archive, that indemnity may well be impermissible under their respective state laws–and that’s something that ought to interest attorneys general, as would the converse failure to obtain indemnity.

On the other hand, one of the legal arguments used as encouragement to librarians to sign onto the legal opinion was offered by one Kyle Cortney (securely employed by Harvard University) based on the privilege of “superpowers.”  Yes, that’s right:

[L]ibraries and archives have “superpowers” under the copyright law that allows us to supply our communities with access to materials for research, scholarship, and study….Before I get to the TEACH Act, Section 108, or any other superpower – first and foremost, we must talk about fair use. While this isn’t a library superpower – fair use is for everyone! – it certainly falls to the libraries and archives, in many circumstances, to be the champions of fair use on campus (and bust any fair use myths!)

See?  “Our dream”, “our national emergency”, “our superpowers.”  And “our” powers are so “super” that “we” will shove those superpowers where the sun doesn’t shine in the middle of the Harvard Yard.  All based on a superpower of blatant distortions of fair use subsidized by the endowment of the richest university in the history of the world.  But understand this, you will win this argument about the same time that Harvard refunds tuition in the time of the virus.  Unless you are willing to go to the mattresses.  And if you’re thinking these superpowers are on their knees begging to be sued, you very well may be correct.

That “superpower” privilege may be how they roll at Harvard, but what I’d like to know is how many state AGs have signed up for the superpower theory?  Such as the Attorneys General of Illinois, Kansas, Michigan, Virginia, North Carolina, Ohio, Pennsylvania, California, Washington, New York, Indiana, Massachusetts, Florida, Minnesota, Texas, and Idaho.

Maybe the next sound they hear will be sad trombones, all 76 of them.

MUSICCOVIDRELIEF.COM EXPLAINS CARE ACT AND OTHER PANDEMIC RESOURCES FOR THE MUSIC BUSINESS

A host of organizations have come together to create MusicCovidRelief.com, a website that explains the ins and outs of the CARE Act, the pandemic relief bill.

MusicCovidRelief
http://www.musiccovidrelief.com

Spend some time on the site and learn about the many cash resources made available by the historic legislation.  The good news is that self employed and small business can take advantage of funds, but move quickly because the funds are available on a first-come first-served basis.

Big thanks to RIAA for putting this together so quickly.  Visit  MusicCovidRelief.com to know what’s on offer.  You may also find the return of the Carte Musique to be of interest as in this post from Chris that is getting uptake in some policy circles it limits the purchasing power to tracks bought from a local retailer.  Again–Carte Musique cannot be used at Amazon but can be used to buy directly from a participating store.  The Carte could be cosponsored by big brands even for tours with tour branding.

Universal Announces Generous COVID19 Policies

[Editor Charlie sez:  File this under “our finest hour.”  Universal Music Group sets a high bar for generously supporting its employees, artists and songwriters as well as the broader community in this announcement.  We’re looking forward to a generous response from the music services, too.]

Supporting Our Artists and Songwriters

Our companies – including our labels, Universal Music Publishing Group, Universal Music Enterprises, Bravado as well as our independent distribution services – are offering various forms of assistance (such as interest-free royalty advances and fee waivers, among others) to help qualifying artists, songwriters and independent labels affected by COVID-19 weather these challenging times. We are also providing our artists with tools and platforms to reach fans and generate income when touring and other live appearances are not possible.

Read the post on the Universal Music site.

@NorthMusicGroup’s Excellent Analysis of MLC Metadata Issues

It has been patently obvious from the first discussions of the Mechanical Licensing Collective several years ago that transitioning from a century of song-by-song licensing was going to be a highly costly and highly complex process.  The MLC was sold to songwriters on the idea that there would be no administrative costs to song copyright owners for participation in the MLC.  Why?  Because the services were going to pay for those administrative costs.  Like the world’s songwriters, we take them at their word.

Zero means zero.

Now that it is time to actually implement the MLC, addressing those administrative costs have become front and center.  The Copyright Office has put a number of issues out for public comment for purposes of drafting regulations covering that implementation including what metadata must be delivered to the MLC.  Those regulations are a significant inflection point for driving the industry toward metadata standards that start in the recording studio and end at the distribution point.

If we fail to seize this opportunity, it is not a very big leap to see a true morass at the MLC.  But before we deal with the prospective solution, the Copyright Office needs to address the retrospective problem.  Remember, the MLC is charged by the U.S. Congress with the task of licensing all songs in copyright that have ever been written or that ever may be written and is exploited under the blanket license.  The first clause of that disjunct is every song in copyright that has ever been written–in any language–and that’s a lot of songs.  And even more metadata.

The MLC “global rights database” is an empty vessel that must be filled and how that vessel is filled–and the cost of filling it–must be addressed now.  It is hard to believe that an organization that in the last nine months has failed to launch a website beyond what anyone could throw up with a Squarespace account is going to hit their January 1, 2021 deadline (the “License Availability Date”).

In addition to public comments, the Copyright Office is arranging for calls with interested parties provided that the party initiating the call document the discussion in a letter that is posted on the Copyright Office website.  You can read the letters here–if you know what to look for.  These calls tend to focus on some of the more bread and butter issues that one would have thought would have been resolved before any entity was designated as the MLC.  This is particularly confusing since the services get the benefit of the MMA safe harbor immediately, but may not be able to account to songwriters for the foreseeable future.  And the blanket license was kind of the point of the whole exercise.  And, of course, the coronavirus is the tailor-made WFH excuse that will mask a thousand failures.

I want to call your attention to an excellent confirming letter by Abby North that hits many of these issues head on.  We’re really glad that she raised these issues with the Copyright Office so that the Office gets the perspective of independent publishers and songwriters who are expecting the MLC to cover the cost of preparing and delivering their metadata.

This passage is particularly illuminating:

Realistically, rightsholders with more than just a few works must have access to batch works registration tools: an excel spreadsheet template must be created and made available, and a method for that spreadsheet to be validated and then imported into the works database must be made available.

For the MLC database to have truly comprehensive, standardized and accurate works data and be compatible with global Collective Management Organizations (CMOs), the MLC must accept CWR as a works registration format. The MLC must also provide or support an affordable tool for creation of CWR files.

Common Works Registration (CWR) is the works registration standard utilized by most collection management organizations around the world.

There are multiple concerns related to the use of Common Works Registration (CWR) by the MLC. The first concern is pricing and availability of CWR software.

CWR is currently available as part of very expensive rights management software used by many mid- sized and large publishers. For rightsholders who do not have the budget or need for such rights management tools, there must be reasonably priced CWR availability to all rightsholders that need to register many musical works.

The second issue relates to whether a publisher IPI will be required by the MLC for a rightsholder to be allowed to submit a CWR file.

Currently, only publishers (as opposed to writers) may receive CWR Submitter IDs and be recognized as submitting parties. To affiliate as a publisher with ASCAP costs $50. To affiliate as a publisher with BMI costs $250. It is not reasonable to require a rightsholder to pay to get a publisher IPI, just so that rightsholder may submit CWR files to register its works.

The CWR specifications indicate a writer may be a CWR submitter. However, according to my research querying many of the world’s largest CMOs, those CMOs do not accept CWR files directly from writers, unless the writer is also a publisher with a CWR Submitter ID.

One reason for this is that the file-naming requirements within the CWR spec require a CWR Submitter ID. Another reason is simply that Writers thus far have not attempted to submit CWR files.

It would be advisable for the MLC to accept works registration files in the CWR data standard, but modify the CWR specified file-naming convention such that a submitter could be a rightsholder with no CWR Submitter ID.

I commend North Music Publishing’s comment to you as Abby North raises may critically important points that I fear will be swept under the rug.

It is important to note that there is a huge difference between ASCAP and BMI charging to affiliate and the costs of complying with the MLC’s registration formalities.  (Realize that MLC registration formality is different than a copyright registration filed with the Copyright Office.)  ASCAP and BMI compete with each other and unlike the MLC neither affiliation is required by the Copyright Act.

Another difference is that ASCAP and BMI are not funded by the music users (or collective licensees) and neither represented to songwriters that the music users would pay the entire cost of administration–including submitting metadata, tax documents, correcting mistaken registrations, and otherwise complying with the MLC’s formalities.  This is particularly mystifying to ex-US songwriters who have quite a different experience with their local collecting societies.

Because if “the services will pay for it” doesn’t include these out of pocket costs taken–there’s that word again–by the Congress by imposing the formality in the Music Modernization Act, then it looks like the only thing that “administration” does cover is the tens of millions of the cost of the MLC’s rather luxurious overhead.  Overhead that looks even more luxurious with each passing day in the time of the virus.

If these issues that Abby North raises do not get fixed, there is really something wrong going on.