Nicole Haff & Cassie Daum: Timed Out and Tuned Out: The Forfeiture of Unclaimed Royalties and the Loss of Meaningful Access to Litigation Under the Music Modernization Act

[It was only a matter of time–the controversial Music Modernization Act is producing new legal analysis showing it’s not what it’s cracked up to be!]

On December 21, 2017, the Music Modernization Act of 2017 (H.R. 4706) was introduced in the House of Representatives.  The bill seeks to modernize the U.S. music licensing system by (1) creating a not-for-profit mechanical licensing and royalty collective to collect and distribute mechanical royalties from interactive streaming services, such as Spotify, Apple Music, Pandora, Google Play Music, Tidal, and others, (2) requiring Copyright Royalty Judges to establish rates and terms that would have been negotiated in the free market between a willing buyer and willing seller by examining economic, competitive and programming information, such as the rates that recording artists earn, and (3) changing the rate court procedure for ASCAP and BMI, the two largest performing rights organizations in the U.S., by randomly assigning federal court judges from Southern District of New York to each rate setting proceeding.

While many in the music industry welcome this bill, smaller publishers and musicians may be surprised to learn that several of the provisions in the Music Modernization Act may harm their interests.

Read the post on SGR Law

@_davidturner_: Spotify Is in the Business of Selling You Spotify, Not Music

Make no mistake—Spotify is only interested in selling you Spotify.

On Monday, the Huffington Post’s contributor platform published a storyby #IRespectMusic founder Blake Morgan, detailing a heated exchange between him and an unidentified Spotify executive that took place in 2014. Titled “Spotify’s Fatal Flaw Exposed: How My Closed-Door Meeting with Execs Ended in a Shouting Match,” the piece was removed from the website hours after posting.

Morgan’s piece was reposted on the Trichordvist, a community blog that is, according to their website, “for those interested in contributing to the advancement of a Sustainable and Ethical Internet for the protection of Artists Rights in the Digital Age.”

Read the post on Track Record

Truth Will Out! @digitalmusicnws: Surprise! The ‘Music Modernization Act’ Prohibits Litigation Against Streaming Services [With New Even Safer Harbor]

[Editor Charlie sez:  You’ve all probably gotten mass emails full of glittering generalities about the Music Modernization Act.  Well…you’ve been Sneekyfy-ed! Chris thinks the prohibition on litigation may not apply to voluntary licenses that they get, only the compulsory license that you get…more to follow…breaking!]

The Music Modernization Act has been touted as a progressive step for royalties in the digital era.  Just be careful of the fine print around page 82…

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So there’s a brand-new piece of music legislation on Capitol Hill.  Called the ‘Music Modernization Act’ (H.R. 4706), the measure is designed to greatly modernize digital-era royalties and solve a gaggle of previous lawsuits.

Overall, the measure is being applauded as a way to increase royalty payments to rights owners in the future.  All while simplifying the licenses and transparency of payments.

Among other changes, the bill updates Section 115 of the U.S. Copyright Act to create a single licensing entity and a blanket licensing system for mechanical publishing licenses.  That entity would be funded by digital music services and overlooked by various publishers and songwriters.  Both sides seem to like this bill.

About time, right?  But here’s the catch: if passed, it effectively shuts down any potential legal claims on unpaid mechanical royalties from companies like Spotify.  That’s right: if the lawsuit wasn’t filed by January 1st, 2018 (i.e., the past), courts will throw out the suit.  And streaming companies (or any other music platform) get away with it.

Which is one reason why Spotify absolutely loves this bill.

Read the post by Paul Resnikoff on Digital Music News

Read the Music Modernization Act here

@naterau: As landmark songwriting bill gains momentum, Songwriters Guild Association raises concerns

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.

Read the post on The Tennessean

@songpreneurs: Why Is Tom Petty Suing Spotify and How Does This Relate to the Music Modernization Act?

[Editor Charlie sez:  Another songwriter group against the controversial Music Modernization Act! See the Songwriter’s Guild opposition letter here  and read the legislation here.]

The end of 2017 and beginning of 2018 has seen a flurry of activity as headlines reveal another $1.6 Billion Dollar Lawsuit against the tech streaming online distribution company, this time by Wixen Music Publishing, who represent compositions by Neil Young, Tom Petty, Rage Against the Machine and others.

This latest lawsuit joins nearly half a dozen other class action / lawsuits against Spotify by independent music creators and rights administrators filed in the past two years.

“The Trichordist” blog collaborator, Cracker and Camper Van Beethoven front man, David Lowery of Athens, Georgia and songwriter Melissa Ferrick successfully sued Spotify and settled with a $43.4 Million Fund for unpaid songwriter and publisher royalties last year.

Around the same time the NMPA (National Music Publishers Association) also stepped in and made their own $30 Million settlement with Spotify as reported by Robert Levine in Billboard in May of 2017.

Nashville / Texas based Bluewater Music Services Corp filed a lawsuit against Spotify in 2017, led by champion of the underdog attorney Richard S. Busch, the same lawyer who represented the victorious Marvin Gaye estate in their “Blurred Lines” infringement case, and helped Eminem successfully stand up to EMI when his rights were being squashed in the name of commerce.

The Bluewater suit and yet another Spotify lawsuit by an independent music publisher, Rob Gaudino are both detailed in this Variety article “Spotify Faces Two New Lawsuits From Music Publishers” by Janko Roettgers in July 2017.

 These lawsuits highlight Spotify’s ongoing battle to do business with its suppliers, the songwriters and music publishers who are forced through federal regulation to make their material available to Spotify and other streaming companies against their will through a practice known as Compulsory Licensing, whereby the rights owners are not permitted to deny usage of their intellectual property.

What kind of negotiation can actually happen if one party cannot walk away?  Not much, we are proving.

Read the post on Songpreneurs

Joint statement on Music Modernization Act of 2017 from NMPA President & CEO David Israelite, ASCAP CEO Elizabeth Matthews, BMI President & CEO Mike O’Neill, NSAI President Steve Bogard and SONA Executive Directors Michelle Lewis and Kay Hanley

We strongly support the introduction of the Music Modernization Act which represents months of collaboration and compromise between the songwriting and tech industries. This legislation enables digital music companies to find the owners of the music they use and reforms the rate setting process for performing rights, ensuring that songwriters and music publishers are paid faster and more fairly than ever before.

“For too long, digital music services have taken advantage of the ‘bulk NOI’ process and often failed to find the correct creators to pay, and now – by working together – this bill ends this practice by creating a private-sector system where money will no longer be lost to inefficiencies and lack of information. The bill also improves how mechanical royalty rates are calculated by introducing a willing-seller/willing-buyer standard.

“On the performance rights side, the bill also replaces the current rate court system with the random assignment of judges used in most federal court cases, and allows the rate courts to review all relevant market evidence into the valuation of how songwriters are compensated.

“We thank Congressmen Collins and Jeffries for their leadership in striking this balance that improves and modernizes our outdated licensing system and gives songwriters the ability to be paid what they deserve across all platforms that use music, including the growing interactive streaming services.”