Where’s the Money? What’s My Name? @CopyrightOffice Unclaimed Royalties Symposium Update from @SGAWrites

[Editor Charlie sez:  Here’s an update from Songwriters Guild of America counsel Charles Sanders on last week’s Copyright Office Unclaimed Royalties Symposium in Washington, DC.  The Copyright Office is supposed to post a video of the event at some point.]

WASHINGTON, DC: I had the opportunity yesterday to attend and participate in, on behalf of the Songwriters Guild of America (SGA), the US Copyright Office “Kickoff” symposium on the eventual disposition of unmatched mechanical royalties that will soon be turned over to the Mechanical Licensing Collective under the new Music Modernization Act.

It was a good start to a healthy music community discussion, provided that next time around we delve into the more difficult issues that have been pointed out by the US and global music creator community, as voiced yesterday by SGA. These include the fact that the creator community –despite dozens of requests over the past several years by SGA (and other attendees such as indie publisher Monica Corton and MLC Chair Alissa Coleman)– still does not know how much money in unmatched royalties is actually being held by the digital delivery services. The amount is suspected to be in the hundreds of millions. SGA was the only participant to raise this issue yesterday, and received no response.

SGA also noted for the record from the podium that the data points identified in the legislation for mandatory inclusion in the Musical Works Database still do not include the NAMES OF COMPOSERS AND SONGWRITERS, a serious omission (to say the least) that SGA has respectfully asked the US Copyright Office to address as soon as possible. It was further noted that SGA President and hit songwriter Rick Carnes, and the SGA board of directors, support strong Copyright Office oversight regarding the activities of the MLC, especially concerning identification of unmatched royalties, an issue fraught with potential conflicts of interest within the MLC board.

Society of Composers and Lyricist (SCL) president and composer/arranger /condutor Ashley Irwin, and Songwriter/Recording Artist Michelle Shocked, joined SGA in making very powerful points concerning the need to ensure the voice of the individual, independent music creator is heard on all MLC issues. They also noted for the record that the abrupt decision of independent Songwriter/Artist/Activist David Lowery to leave his position as an MLC committee member was not addressed at the meeting, nor was the process by which he will be replaced a topic of discussion. “The independent music creator community wants and should have a voice in that process,” said Irwin. “Creators have suffered grievous harm at the hands of the digital distributors,” added Shocked, “and we deserve to be heard.” She received an ovation following those very pertinent remarks at the very end of the program.

STAY TUNED.

@MusicArtistsCo: Music Artists Coalition Call for Regulations Greater Transparency in MLC

[Editor Charlie sez:  We were going to give you some quotes from this filing at the Copyright Office by the newly formed Music Artists Coalition but it was all so important we couldn’t decide what to leave out!  We bolded some of the parts we thought were important.]

Before the Library of Congress
United States Copyright Office
101 Independence Ave. S.E.
Washington, D.C. 20559-6000 

Music Modernization Act Implementing Regulations for the Blanket License for Digital Uses and Mechanical Licensing 

37 CFR Part 210
Docket No. 2019–5
Notice of Inquiry, September 24, 2019 

Comments of Music Artists Coalition 

Beginning in the summer of 2019, a group of music creators and talent representatives have joined forces to form the Music Artists Coalition (MAC). MAC’s mission is to be a voice for music artists on legal and policy issues that impact them. While technology has significantly expanded the way we experience music, the rewards still need to be shared fairly with those who create it. With the music business at an inflection point, decisions are being made now that will impact music creators’ intellectual property rights and livelihoods for decades to come. 

MAC has a strong board of directors and robust membership, ranging from iconic musicians and songwriters, to those just getting their start. MAC members include Diplo, the Doobie Brothers, Don Henley, Def Leppard, Lizzo, Dave Matthews, John Mayer, Shane McAnally, Maren Morris, Anderson .Paak, Linda Perry, Spoon, Bernie Taupin, Meghan Trainor, and Verdine White. MAC has already engaged on issues important to music artists including working with industry groups on an exemption to the recently passed California Assembly Bill 5 and advocating on behalf of songwriters in the Department of Justice’s review of ASCAP and BMI’s consent decrees. 

As the Copyright Office works to fully implement the Orrin G. Hatch-Bob Goodlatte Music Modernization Act (P.L. 115-264), MAC is interested in ensuring that there is increased transparency in the establishment of the Mechanical Licensing Collective (MLC) and that the MLC, once fully operational in 2021, will treat small, independent publishers and songwriters as equals to large publishers. 

Mechanical Licensing Collective 

In accordance with Title I of the MMA, the Register designated the Mechanical Licensing Collective, Inc. (MLCI) as the mechanical licensing collective and Digital Licensee Coordinator, Inc. as the digital licensee coordinator. While MAC acknowledges that these groups, supported by the National Music Publishers’ Association (NMPA), the Nashville Songwriters Association International (NSAI), and the Songwriters of North America (SONA), most nearly fit the criteria laid out in MMA, namely the that designee be “endorsed by, and enjoy substantial support from, musical work copyright owners that together represent the greatest percentage of the licensor market for uses of such works in covered activities, as measured over the preceding 3 full calendar years,” many creators have expressed concern regarding the specifics of the selection process and would like to see increased transparency. 

Additionally, MAC has concerns regarding the selection and makeup of the MLC board of directors and members of the task-specific committees (the Unclaimed Royalties Oversight, Dispute Resolution, and Operations Advisory Committees). 

As of yet, the MLC has not published: 

1.) Term lengths for each member of the board of directors 

2.) The process for electing a member to the board of directors 

3.) The process for filling a seat on the board of directors that is vacated before the end of a term 

The ongoing makeup of the Unclaimed Royalties Oversight Committee is of particular concern to MAC members. MAC is content with the initial committee proposed by MLCI as “each publisher representative on the… committee is affiliated with an independent music publisher,” providing some assurance that the committee will concern itself with not only the rights of major publishers, but also smaller actors in the space. However, there is little guarantee of such a committee makeup once the terms of the current committee end at some point in the future. 

Additionally, there is a question of parity between the ten voting board members appointed as representatives of music publishers and the four board seats allocated to professional songwriters who have retained and exercise exclusive rights of reproduction and distribution for musical works they have authored. These seats reserved for songwriters should be able to be filled by artist representatives as well as the artists themselves. After all, the seats filled by the music publishers are not exclusively filled by the chief executives of those entities or their top officers. 

Finally, once fully operational, the new blanket compulsory licensing system for digital music providers should provide other music application program interfaces (APIs) with access to the public database. Allowing these third-party APIs access and ensuring it is easily interoperable with other systems is the best way to make certain the MLC database becomes part of the overall music licensing ecosystem. 

Management Structure 

In the winning MLCI proposal, the designee had “not yet determined the precise management structure for daily operations or full staffing.” Offered instead is an outline, which “may be materially different, with both additions and removals of roles,” once the MLC becomes fully operational. Nor has the designee determined the compensation for the initially proposed fifty-five employees of the MLC, presumably based in Nashville, although the proposal does estimate that yearly executive compensation will be in the range of $3,330,000 to $3,500,000, aggregate. Beyond these topline numbers, no additional detail is given. 

As implementation and startup of MLC continues, MAC would encourage both the Copyright Office and the MLCI to remain committed to maintaining a transparent process in which all stakeholders have access to relevant information. 

Vendor Selection 

The need for a fully transparent process is also deeply important in the RFI/RFP process to select a vendor. Pursuant to Section 115(d)(3)(E)(vi) of the MMA, this vendor will be tasked with building and maintaining “end-to-end databases and systems for ownership identification, matching and claiming, and royalty collection and distribution.” 

As this process moves to the RFP stage and proposals are received by the seven entities who cleared the RFI stage, MAC hopes that these responses will be published publicly, either in full or lightly redacted to preserve confidential business information. 

Respectfully submitted, 

/s Jack Quinn 

President
Music Artists Coalition