@MicahSingleton: SoundCloud to Let Fans Pay Artists Directly

[Editor Charlie sez: The “virtual gift” is kind of old news and we’ve been covering it since 2018–but–it’s another market confirmation that streaming royalties are inadequate (nobody talked about virtual gifts with Tower Records or iTunes Music Store). It would be better if Spotify spent less time gorging themselves with their snouts in the public markets trough and more time figuring out how to pay performers a sustainable royalty.]

SoundCloud is preparing to introduce a new payment system that would allow fans to pay artists directly, multiple sources close to the situation tell Billboard, setting what could be a game-changing precedent for the streaming world.

The move would make SoundCloud the first major music streaming service to embrace a direct payment model, a strategy that has been popular with Chinese streaming services like Tencent Music’s QQ Music for years, and one that subscription services like Patreon and OnlyFans have built their businesses around, as musicians and fans around the world clamor for bigger digital music distributors to do the same.

Read the post at Billboard

Read Chris’s 2018 post about virtual gifts: Ethical Props–How Streamers Can Empower Fans on the Path to Sustainability 

@musictechpolicy: How Songwriters Get Screwed by Cheese and Pies

For some reason, there’s a focus at the moment on songwriter royalties and in particular for streaming royalty rates.  Notice that I said “rates” not “share” or the one I find particularly irritating, “share of the pie.”  Let us be clear—there is no “pie” there are only “rates”.  Or should be.  Let’s investigate why.

To frame this idea (speaking for the U.S. market), let me take you back to a conversation I had with a Nashville session musician and hit songwriter many years ago back before physical mechanical royalty rates were frozen.  

He looked at me and said, “Why do I have to take this government cheese royalty rate?  I get double scale when I play a date, why can’t I get double stat?”  

What he was really saying was why can’t I set my own price as a songwriter for mechanical royalties?  And the answer is the same today as it was then:  Because songwriters allow the U.S. government to set the price and terms for mechanicals.  Or rather the “minimum statutory rate” which is a joke because the “minimum statutory rate” has never been a minimum, it has always been both a minimum and a maximum.

There has also long been an obsession with songwriters and publishers comparing their rates to what artists and record companies get.  This comparison was only compounded in the digital era particularly for interactive streaming.  If you combine song rates and recording rates, some people get a pie.  Other people (like me) get an error message.  I’ll explain why.

Read the post on MusicTechPolicy

@volumecontrol10: Streamlining the Streaming Regime: Of rat kings and royalties in the streaming age

After a decade in which it seemed like illegal downloading had made it all but impossible for record companies to eke out a profit, recent years have seen things improve for the music industry. The rise of streaming services like Spotify have helped restore the major labels—now fused into three massive conglomerates—to their nineties-era wealth, with untold riches beckoning on the horizon. Despite this, the situation for musicians has never been grimmer. Streaming has failed to match the income that artists once garnered from album sales. Constant touring has replaced some of this, but for many, especially older performers, it can’t make up the gap.

While musicians struggle to bring attention to these untenable conditions, the industry’s C-suite has focused their efforts elsewhere. As firms like Spotify and Pandora glided to multi-billion-dollar valuations, hailed in the press as “saviors” of the industry, they failed to pay for all of the intellectual property on which their products were based. This gave rise to a slate of expensive and potentially destabilizing litigation that threatened such companies—and the major labels’ projected earnings. Faced with these pressing concerns, record label executives, music publishers, tech moguls, and telecommunication lobbyists came together to create legislation to address what they perceived to be the pitfalls of music’s new digital economy.

Read the post on The Baffler

@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.