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.
[Editor Charlie sez: This tinkering with the board seats changes the songwriter vote from 2/10 to 4/14, a change from 20% to 28% on the new collective created by the MMA, aka the self-licking ice cream cone. This board structure is still wildly out of sync with every other creator collective in the world and will no doubt be opposed by ex-US writers. Remember–the MMA covers all songs ever written or that ever will be written, including both US and ex-US works exploited in the US. If the last compulsory license is a guide, the MMA will last 100 years after the Spotify IPO. And still does nothing to police the mass NOIs that are filed every day. But good news about extracting support for Google-opposed Copyright Small Claims Court.]
What the law ultimately says is up to members of the House and Senate, who will write the legislation and the subsequent regulations, but in the meantime, negotiations…have resulted in a proposal that allows songwriters and composers to have four seats on the now-expanded 14-seat board of directors, instead of the initially allotted two seats for songwriters on a smaller 10-seat board; while the unclaimed royalties oversight committee will now be evenly divided between publishers and songwriters. It also has resulted in additional clarifications to how payouts from unclaimed funds are distributed.
While the…the NSAI and SONA…had already come out in favor of the proposed legislation, the Songwriters Guild Of America initially withheld endorsing the legislation, saying it had some reservations about elements of it. But now SGA president Rick Carnes says his group is on board….
As part of the proposed changes, Carnes says that exclusionary clauses in older songwriter/publishers contracts sometimes prevent songwriters from collecting royalties because that clause allows publishers to take the stance that they don’t have to share the money with songwriters if it comes in unattributed to a song. “We tried to clarify that language so songwriters can get their fair share,” Carnes says.
In another move, as part of the negotiations with songwriters, the publishing community has “pledged to lend its full support on Capitol Hill to secure quick passage” of the pending Copyright Alternative In Small-Claims Enforcement (CASE) Act of 2017, which will provide music creators with an alternative to a full blown copyright infringement actions against unlicensed users of music.
[Editor Charlie sez: After the many letters from songwriter organizations, it is looking like what The Bible described as the “full throated endorsement of licensing reform” was more like a throat full of cram down by Big Tech–and their search for yet more loopholes and even safer harbors.]
MUSIC CREATORS NORTH AMERICA
February 1st, 2018
Dear Chairman Goodlatte and Ranking Member Nadler:
Thank you for the opportunity to submit these comments for the record of the House Judiciary Committee field hearing, “Music Policy Issues: A Perspective From Those Who Make It,” held in New York City on January 26, 2018. They are submitted on behalf of Music Creators North America (MCNA), an alliance of music creator organizations that represent the rights and interests of composers and songwriters, principally in the United States. Each of MCNA’s member organizations is run exclusively by and for music creators. As such, MCNA is the pure voice of North American music writers and, through our global alliances, a half-million songwriters and composers around the world.
For the sake of clarity, however, this submission should be regarded as principally representing the view of MCNA’s thousands of American members, rendered with the full support of the MCNA-aligned international music creator community.
Specifically, we would like to address issues concerning the Music Modernization Act (HR. 4706). In doing so, we want to stress that MCNA and its coalition partners enthusiastically support the principles underlying HR 4706, and wish once again to thank Representatives Doug Collins, Hakeem Jeffries, and the other co-sponsors of the bill for their hard work and devotion to the cause of protecting the creative community.
We note that, at the January 26 hearing, several members of the Judiciary Committee asked the panelists a significant question that went unanswered. In the paraphrased words of Representative Demings, if, as some panelists indicated, the MMA is not perfect, how can it be improved? Since none of the panelists addressed that important inquiry in detail, we would like to take this opportunity to draw to the Committee’s attention three crucial clarifications, among a number of concerns, that would give great benefit and comfort to the community of American songwriters and composers, issues we very much hope to discuss with the Committee’s Members prior to mark-up.
Chief among them is the selection of the members of the boards of the proposed Collective, both the number of seats allotted to songwriters and composers and the election process to fill those seats. As you and the members of your Committee well know, Article I, Section 8 of the United States Constitution recognizes the rights of authors and inventors and empowers Congress to protect those rights. The work of songwriters and composers (i.e. authors) is the foundation on which rests the entire music industry, the business of commercial entities that distribute music, and the enjoyment of music fans.
While songwriters and composers are free to engage in contractual relationships with publishers, record companies, and a wide variety of representatives covering other aspects of their careers, US copyright law gives most creators them the unfettered right to control their work from inception.
As the creators of these foundational works, we are simply seeking an appropriate voice in their exploitation. In order to ensure that our voice is truly heard, it is of crucial importance that the legislation provide the songwriter and composer community (as distinguished from, for example, those who administer our rights) with a democratic means of selecting a number of board members equal to those of music publishers and other administrators. These should be knowledgeable, independent, and unbiased music reators capable of ensuring in a cooperative way the protection of our rights and interests. We believe that the details of such a process can be arrived at with the cooperation of our colleagues in the music publishing community, and we look forward to that opportunity.
The second issue is a simple clarification in the “Songwriter Payments” provisions found on page 40, line 17 of HR 4706. In order to ensure that music creators get the full benefits of their contracts with music publishers, we believe that very concise language can be added for clarity to ensure that—as intended by all parties—the distribution of unmatched royalties is made by the Collective and by music publishers on a designated, per title basis. Without this language, it may be possible for a music publisher or administrator to pay such royalties to music creators at rates significantly below those set forth in their contracts. We will be happy to provide draft language in that regard if the Committee deems it appropriate.
The third issue concerns the integrity and structure of the mandated database,specifically, the vital inclusion of unique creator identifiers. As you are most likely aware, many music creators make relatively frequent changes in their contractual relationships with publishers, administrators, and others. (This, of course, is one of the frustrating situations with which music users must deal when seeking licenses.) But the name and, therefore, the identifying information of the creator of a composition, never changes. Therefore, for data accuracy and accessibility for music users, music publishers, and music creators to be fully realized, a creator’s number should be recorded on every musical composition in the database stipulated in HR 4706. This will greatly enhance the ability of individual music creators to identify their works, especially those compositions still unmatched, so that they can claim royalties for their uses.
We are pleased to report that discussions of these issues are underway between and among members of the music community. We ask for the Committee’s assistance, indulgence, and encouragement to allow this process to move forward prior to mark-up.
Thank you, Chairman Goodlatte and Ranking Member Nadler, for all you have done forthe American music creator community and the protection of copyright. We are grateful to have been provided with the opportunity to expand and clarify the record on these important issues. We look forward to working with you and the Committee to ensure that this enormously important piece of legislation is the very best bill it can be.
For Music Creators North America (MCNA)
cc: Members of the Committee on the Judiciary, United States House of Representatives
For a listing of MCNA Members and Associates, please refer to the website: www.musiccreatorsna.org
[Editor Charlie sez: Failing to pay pre-72 artists the digital royalties they are entitled to is another example of how Big Tech forces wasteful lawsuits–and cons the industry into false choices on “omnibus” legislation!]
A veritable supergroup’s worth of sixties musicians on Friday (Jan. 12) filed an amicus brief in a California lawsuit against Pandora for its use of sound recordings made before 1972, and thus not covered by federal law. Although the issue in the case — originally brought by Flo & Eddie, Inc., which owns the Turtlesrecordings, and currently before the California Supreme Court — is fairly obscure, the artists are anything but. The amici artists include Carole King, Melissa Etheridge and Doors drummer John Densmore; the estates of Hank Williams and Judy Garland; and companies like the Beatles’ Apple Corps., Grateful Dead Productions and Experience Hendrix.
At stake is whether, and how, non-interactive streaming services like Pandora need to compensate performers and labels for their use of older recordings that are still covered by state law. The music industry has also been lobbying for a legislative answer to the question, and the recently introduced CLASSICS Act (Compensating Legacy Artists for their Songs, Service, & Important Contributions to Society Act) would require digital services to pay for the use of recordings made before 1972. On Jan. 26, the Friday before the Grammy Awards, the House Judiciary Committee will hold a “field hearing” in New York on this and other copyright issues, according to multiple sources.
The president of the Songwriters Guild of America is in Washington, D.C., this week to push for changes to the Music Modernization Act, which has the support of most songwriting, publishing and digital music stakeholders.
The landmark legislation, introduced in December, would create a new digital mechanical licensing organization, which would be in charge of identifying a composition’s publisher and songwriters to make sure they are paid accurately.
Streaming services like Spotify and Apple Music would attain a blanket license, while songwriters would presumably be accurately identified and paid for their work, while also being subject to a new, more favorable royalty rate-setting standard.
But SGA President Rick Carnes raised concerns about the legislation in an interview with The Tennessean this week. Carnes said the new licensing organization, which some in the music industry have dubbed SongExchange, should be, at a minimum, equally run by songwriters and publishers.
Under the current legislation, publishers would have eight of the 10 board seats and self-published songwriters would have two. Carnes said the proposed licensing cooperative should follow the same model as the existing nonprofit SoundExchange, which handles digital licensing for artists and record labels.
“The first thing we did when we got this bill was take it to our sister songwriting organizations across the world. And the first thing we heard was that it should be at least, at the very least, 50-50 on the board,” Carnes said.
Carnes also expressed concern with a component of the legislation to disperse unclaimed royalties after three years. The bill would put the onus on the new organization to identify publishers and songwriters whose songs are used by the streaming services.
If a songwriter cannot be identified and doesn’t step forward to claim royalties after three years, the funds would then be dispersed among existing publishers and songwriters based on their streaming activity.
The biggest story of 2017? To my mind, there is no contest — the broad emergence of an awareness that the irresponsibility masquerading as Internet freedom represented a threat to global societies and to cherished aspects of our humanity, and that a course correction was badly needed.
While recognition of the fact that rewarding lack of accountability would likely incentivize anti-social and illegal conduct took longer than it should have, such an awareness came to fruition throughout 2017. Whether motivated by concerns about sex trafficking or the prevalence of other internet-enabled crimes, fake news, foreign government interference in elections, monopoly or monopsony power, or the perceived political or cultural biases of platforms, the question at the end of 2017 wasn’t whether the current legal framework for platform responsibility should be amended, but how.
It became clear that the twin pillars upholding the current lack of accountability in the internet ecosystem — Section 230 of the Communications Decency Act and Section 512 of the DMCA, each of which was adopted at the dawn of the commercial internet, would need to be reexamined and a new framework established.
Late last month, Mark Zuckerberg wrote a brief post on Facebook at the conclusion of Yom Kippur, asking his friends for forgiveness not just for his personal failures but also for his professional ones, especially “the ways my work was used to divide people rather than bring us together.” He was heeding the call of the Jewish Day of Atonement to take stock of the year just passed as he pledged that he would “work to do better.”
Such a somber, self-critical statement hasn’t been typical for the usually sunny Mr. Zuckerberg, who once exhorted his employees at Facebook to “move fast and break things.” In the past, why would Mr. Zuckerberg, or any of his peers, have felt the need to atone for what they did at the office? For making incredibly cool sites that seamlessly connect billions of people to their friends as well as to a global storehouse of knowledge?
Lately, however, the sins of Silicon Valley-led disruption have become impossible to ignore.
Facebook has endured a drip, drip of revelations concerning Russian operatives who used its platform to influence the 2016 presidential election by stirring up racist anger. Google had a similar role in carrying targeted, inflammatory messages during the election, and this summer, it appeared to play the heavy when an important liberal think tank, New America, cut ties with a prominent scholar who is critical of the power of digital monopolies. Some within the organization questioned whether he was dismissed to appease Google and its executive chairman, Eric Schmidt, both longstanding donors, though New America’s executive president and a Google representative denied a connection.
Meanwhile, Amazon, with its purchase of the Whole Foods supermarket chain and the construction of brick-and-mortar stores, pursues the breathtakingly lucrative strategy of parlaying a monopoly position online into an offline one, too.
Now that Google, Facebook, Amazon have become world dominators, the question of the hour is, can the public be convinced to see Silicon Valley as the wrecking ball that it is?
These menacing turns of events have been quite bewildering to the public, running counter to everything Silicon Valley had preached about itself.