Chris Castle writes a high level summary of the new rules regarding statutory damages for pre-72 recordings.
by Michael Huppe, President and CEO, SoundExchange
The Music Modernization Act (MMA) now has the support of 76 Senators. As it nears the finish line, SiriusXM is going door-to-door in the Senate in a last-ditch effort to block the MMA, a bill backed by an historic coalition of thousands of music creators, songwriters, producers, labels, publishers and digital music services—all of whom have been working for years to get Congress to reform music licensing laws.
For longtime advocates, it will come as no surprise that SiriusXM is trying to scuttle the MMA at the last minute. This is, after all, precisely what they did 20+ years ago when Congress first enacted legislation giving performers the right to be compensated when digital services use their music. Back then, Sirius stepped in during the final throes of the legislative process to argue that having to pay for music—their primary product—could “disrupt” their nascent business plans. They argued for a special royalty rate–one that effectively forced artists to subsidize their business and gave them a competitive advantage against other companies. That special treatment has gone on for over two decades ago now. We don’t think such a sweetheart deal was justified back then; but it’s indefensible now.
Once separate companies, SiriusXM is now the sole satellite radio company in the U.S. It generates revenue well over $5 billion annually, the huge majority of which comes from its more than 32 million subscribers. To put that into context, U.S. wholesale revenue for the entire record industry was $5.9 billion in 2017. Yes, a single company, SiriusXM, makes nearly as much from subscribers in the United States as all record labels and artists combined make from all sources.
Make no mistake about it: SiriusXM would not have a business without recorded music. And yet, SiriusXM has profited for decades by getting music at a special market distorting rate set under a different standard than all its thousands of internet radio competitors. Specifically, the rates set for internet radio are established under a “willing-buyer/willing seller” standard – another way of saying artists and labels are supposed to be paid a fair market rate for their recordings. When setting satellite radio rates, by contrast, the government can – and has – set rates lower than fair market value based on four amorphous policy factors. The impact is not academic: the lower rate standard has cost creators billions of dollars over the last 20 years.
Multi-billion dollar companies should not be subsidized by musicians – and all competing streaming platforms should play by the same rules.
Seems obvious right? It is, and that’s one of the reasons the Music Modernization Act passed the House of Representatives unanimously (as in 415-0; think on that for minute) and is on the verge of passage in the Senate.
The music community is united around the MMA because it ensures fair treatment for music creators and a level playing field for digital radio services. It is a win-win, and the compromises SiriusXM has proposed are inconsistent with the principles upon which the bill is centered. We look forward to the Senate moving this bill — and with it all of music — forward.
[Editor Charlie sez: In this post David Lowery goes after the narcissist Senator Ron Wyden who is opposing the House of Representatives unanimous and bipartisan vote for the pre-72 fix in the CLASSICS Act part of the Music Modernization Act. Wyden has long been in the pocket of Big Tech and Google Amazon’s huge crony capitalist data centers sucking down power off the Columbia River hydroelectric with tax breaks and pork. He’s using the anti-democratic secret “hold” system to screw artists and defy his colleagues. We say he gets nothing.]
One of the things the Music Modernization Act (MMA) does is fix what is essentially a typo in copyright law that allows a handful of digital services (Google, Sirius, Pandora etc) to not pay royalties to performers on Pre-1972 recordings. This part of the Music Modernization Act is commonly referred to as “The Classics […]
Sen Rony Wyden has just posted a medium blog in which he makes the rather astonishing claim he is helping artists. Let’s look at how Ron Wyden has tried to “help” artists in the past: He sponsored the Orwellian-named “Internet Radio Fairness Act” that would have slashed artists pay from digital services. In some cases […]
“I do believe that the intellectual property that you create is just that. It’s property and you ought to be protected in the property that you create and that we all enjoy.”
Senator John Cornyn, U.S. Senate Committee on the Judiciary, May 15, 2018.
On May 23, without the benefit of any studies, hearings, or stakeholder input, Senator Wyden introduced the “Accessibility for Curators, Creators, Educators, Scholars, and Society to Recordings Act” (“ACCESS to Recordings Act”).1 The bill would preempt the state and common law protections that sound recordings fixed before February 15, 1972 have always enjoyed and make them subject to federal copyright protection. In doing so, it suffers fatal Constitutional flaws.
The Fifth Amendment of the Constitution establishes that the federal government cannot take private property “for public use without just compensation,” a principle stretching back at least 800 years to the Magna Carta.2The Takings Clause, as this provision is referred to, applies just as much to intellectual property, like copyright, as it does to other forms of private property….
Unlike the CLASSICS Act and the approach recommended by the Copyright Office, the ACCESS to Recordings Act falls far short of Constitutional requirements and would likely open the federal government up to liability for takings claims.
[Editor Charlie sez: Our old nemesis Lawrence Lessig is pressed back into service to lead Google’s charge against justice for pre-72 recording artists. True to form, Lessig trots out his own opinions about copyright masquerading as law–opinions that have been shot down twice by the US Supreme Court as Neil Turkewitz teaches us. Ever the victim, Lessig gets cranky when he’s called on it.]
My issue with Larry Lessig is that he is fighting to preserve injustice while claiming to represent the public interest, and that he has such little regard for the truth. Like most zealots, he believes that the ends justify the means. And since the ends he seeks are, from his perspective, so important, they justify extreme means. I find fault with both his desired ends, and with the modalities he is prepared to adopt in pursuit thereof. His defense of the worst aspects of the exploitation economy are both incomprehensible and inexcusable.
Let’s explore. On May 18, Larry Lessig published an article in Wired entitled: CONGRESS’ LATEST MOVE TO EXTEND COPYRIGHT PROTECTION IS MISGUIDED. In it, Lessig sets out the World According to Lessig, (hereafter referred to as WAL), and boy does it bear little similarity to the world the rest of sentient life occupies. Lessig was responding to a bill passed by the House of Representatives and currently in the Senate entitled CLASSICS that would address a gap in federal law that allows certain music services to avoid paying performers and labels for music created prior to February 15, 1972 (the date when federal copyright law first protected sound recordings). Now I say he was “responding,” to the legislation, but that is a bit generous, since his criticisms suggest that he in fact did not read the legislation, or more importantly, take the time to understand the surrounding legal environment in which the legislation is situated. And of course, it goes without saying that Lessig was unmoved by the actual injustice of the present situation.
[Editor Charlie sez: The consensus behind the CLASSICS Act demonstrates just how unready for prime time is the Music Modernization Act. If we’re not going to stand behaind Chairman Nadler’s Fair Play Fair Pay, the CLASSICS Act deserves a chance to stand alone and not be tied to the punitive and controversial Music Modernization Act.]
The 1976 copyright act federalized copyrights for post 1972 sound recordings. Sound recordings made pre-1972 were covered and remain covered by state copyright laws. The 1976 act did not strip the works of copyright protection. Several years ago digital broadcasters and non-interactive streaming services all decided (simultaneously) that the Digital Performance Right in Sound Recordings Act […]