@RobertBLevine_: Federal ‘Transparency’ Bill Endangers Songwriters’ Leverage for Getting Paid

On the surface, at least, the “Transparency in Music Licensing Ownership Act,” introduced in the House of Representatives on July 20 by Congressman Jim Sensenbrenner (R-WI), seems like a copyright bill that could help untangle the online music business. At a time when accurately identifying rightsholders has become an important issue — and an expensive one — the bill would direct the U.S. Copyright Office to create a database to make the process easy. Who could be against transparency? Or an easy way to identify rightsholders? Or, in a business where information is hoarded for strategic advantage, a comprehensive database run by a neutral organization?

Well, the devil is in the details.

Read the post on Billboard

@agraham999: Understanding Music and Blockchain Without the Hype : Revisited

A Guest Post By Alan Graham of OCL. Two years ago, this month, I wrote an article here called “Understanding Music and Blockchain Without The Hype“. As with any nascent technology that shows a great deal of promise, there’s generally a tremendous amount of hyperbole as to what’s possible. A lot can happen in two years.

There’s this perception that blockchain companies provide cheaper solutions, but we’re talking fractional cost savings. These savings may eventually cost more, not less over time. Building world class technology and then running it costs money. If your royalties vanish in a hack, you’ll want to be able to call someone, not talk to a bot.

Read the post on The Trichordist

 

@royaltyclaim CEO: Services are Spending $50,000 a week to file “address unknown” NOIs

Press Release Teaser:

“DSPs are collectively spending an average of over $50,000 PER WEEK to file mass ‘address unknown’ NOIs under the Section 115 compulsory license provision of the US Copyright Act.” – Dae Bogan, Chief Researcher at Royalty Claim / CEO at TuneRegistry

More facts to come out next week when he presents Royalty Claim’s report on the state of unclaimed royalties and music licenses at the Music Industry Research Association’s MIRA Conference on August 11th at UCLA. www.themira.org

@davidclowery: Sensenbrenner’s Extreme Moral Hazard: Bill rewards infringers and punishes songwriter victims

The company that claims to organize the worlds information, could not figure out how locate a songwriter named Brian Wilson, he wrote a little song called “Surfer Girl.”   They filed an “address unknown” notice with the US Copyright Office.  Wtf?

Rep. Sensenbrenner has introduced a bill called “The Transparency in Licensing Act.”  We songwriters call it “The Shiv Act.” It’s pure doublespeak. It has nothing to do with “transparency.”  It is clearly designed to stab songwriters in the back while greatly benefitting the largest members of the Mic-Coalition.org. Read more here,here and here.

In case you are not familiar, the Mic-Coalition is an astroturf group made up of mostly tech behemoths and broadcasters.  At last count these companies’ combined market share exceeded 1.5 trillion dollars. The bill purports to support small businesses like the independent brewers represented by The Brewers Alliance, but it does not.  In fact my unscientific sampling of independent brewers seems to indicate 1) Independent Brewers didn’t know they were supporting this bill, 2) are unaware they were even part of the alliance 3)didn’t know they had urgent music licensing concerns requiring legislative fix. (Maybe the DC policy rep for Brewers Association should explain rationale to members?).

This bill seems to have been designed by the Very Large Business Administration (as opposed to the Small Business Administration). The bill is a complete giveaway to the likes of  Google, and ClearChannel. So just normal pay to play government legislation, right? Nothing to see here people, move along.

Read the post on The Trichordist

@musictechpolicy: Controversial Bill On Music Licensing Has Nothing to Do with Small Business

I dreamed up a startling new technique to attempt to divine whether the true purpose of the controversial Transparency in Music Licensing and Ownership Act (or…”TIMLOA”?)  was intended to protect small business as advertised by the MIC Coalition.  I determined that the safe harbors  in the Transparency in Music Licensing and Ownership Act (or as it’s been called, The Shiv Act) was actually designed to protect the biggest of big business.

What startling new technique did I utilize?  I read the bill.

What you don’t find in the bill is anything that limits its application to small business.  Is it common in music licensing legislation to find such protections?  Absolutely.   This wasn’t what I expected to find given the braying of the Disco Ducks.  But then you know what they say…

The Fair Play Fair Pay Act, for example, has special protection in great specificity for small business like noncommercial broadcasters, public broadcasters and small broadcasters.

The Performance Rights Act (from the 110th Congress) also had very clear exemptions for small broadcasters.

While as a matter of propaganda it ignores these protections, the Local Radio Freedom Act (aka “The Pay Your Rent With Exposure Bucks Act”) is very clear about protecting a particular class of broadcasters: “local radio.”

Exposure Bucks

Yet none of this protective language appears in the Transparency in Music Licensing and Ownership Act.  Why doesn’t the TIMLOA have such limiting language if it’s actually all about protecting small business?  Maybe because it’s not about small business at all?  Maybe it’s about these guys in the MIC Coalition:

mic-coaltion-8-15

Realize some MIC Coalition members are themselves trade associations for companies with combined market capitalizations over $1 trillion.  When you see logos for Digital Media Association, the CEA (now called the Consumer Technology Association) and the Computer and Communications Industry Association (home of the Disco Ducks) these are themselves made up of massive companies like Apple, Amazon, YouTube and of course Google, not to mention Spotify.  True small business can’t afford these lobbyists and PR firms (like the Glen Echo Group) this starts to look like the astroturf plant it really is.

So don’t let them tell you that the Transparency in Music Licensing and Ownership Act  is about small business, unless the MIC Coalition would like to include the kind of protective language in their bill that our business has always included to protect the real small business.

 

@davidclowery: Here’s How You Know Mic-Coalition “Shiv Act” Is About Screwing Songwriters Not Transparency — The Trichordist

Yesterday we detailed one of the main problems with the so-called “Transparency in Music Licensing and Ownership Act” or as Artist Rights Watch termed it “The Shiv Act.” The bill would take away from songwriters legal remedies like attorney’s fees and statutory damages. Thus making it virtually impossible for individual songwriters and small […]

via Here’s How You Know Mic-Coalition “Shiv Act” Is About Screwing Songwriters Not Transparency — The Trichordist

@musictechsolve: Don’t Believe the Astroturf: Yet More Regulations Won’t Help Songwriters or Small Business

By Chris Castle

“[Government] interference is but the first link of a long chain of repetitions, every subsequent interference being naturally produced by the effects of the preceding.”

James Madison, The Federalist Papers No. 44

There is a bill in Congress backed by the mega lobbying juggernaut called the MIC Coalition that would force songwriters and artists to “register” with the government in order to protect their rights from the biggest corporations in the world.  Failing to do so would take away the stick of statutory damages and an award of attorneys fees to songwriters or artists who are victorious in copyright infringement litigation.  Statutory damages and attorneys’ fees are the only real protection that the government gives these creators–the smallest of small businesses.

Why?  Because the government does virtually nothing to protect the rights of artists.  If it weren’t for statutory damages and attorneys’ fees there would be nothing between a creator and the ravages of mega-corporations.  Try calling a U.S. Attorney and asking them to prosecute a massive infringer.  If it hasn’t happened yet given the rampant piracy we’ve seen over the last 20 years now, it should tell you that it’s never going to happen with rich corporations that run roughshod over artist rights.

Yet songwriters in particular are some of the most highly regulated workers in America.  The government forces songwriters to license their work and sets the price they can license at–yet does nothing to enforce the “compulsory licenses” it imposes on songwriters.  Not only is the government in their lives at every turn, songwriters are poorly treated by their government.  Why?  One reason is that songwriters are among the smallest of small businesses and have little political clout.

That explains why the government imposes wage and price controls on songwriters through consent decrees and rate courts, but forgets to raise their wages for 70 years.  Can you imagine how that would go down if the government tried doing the same to auto workers or even the minimum wage?

The Rate that Time Forgot

When the government enacted the Fair Labor Standards Act in 1938, the government-mandated minimum statutory rate for songs was 2¢ per copy.  The hourly minimum wage was 25¢.   The government didn’t get around to raising the minimum statutory rate until 1978 when they raised it to from 2¢ to 2.75¢–the hourly minimum wage had then been raised from 25¢ to $2.65.  Shortly after, the government started indexing the minimum statutory rate from the rate that time forgot–had the government indexed to the rate of inflation from 1909 to 1978, the rate would have been closer to 13¢, a level it has yet to reach over 100 years after it was first set–today the rate is 9.1¢.

That’s a cruel mess.

What happens if a music user wants to avail themselves of the statutory license but simply refuses to pay the paltry royalty rate?  Nothing happens.  At least not unless the songwriter or their publisher sues for statutory damages and attorneys’ fees.  If you’ve followed the class action cases brought by David Lowery and Melissa Ferrick against Spotify, you’ll know that these cases only involve small songwriters.  Now there’s two publishers suing in Nashville–again, small publishers.

If these plaintiffs didn’t have the statutory damages and attorneys’ fees, do you think anyone in the government would care that the government’s compulsory license was being misused?

We’re From Washington and We’re Here to Help

Individual music users like Amazon, Google, Facebook and Spotify have about as much political clout as any notorious monopolists in history from Standard Oil to United Fruit.  As an organized lobbying group, these companies have the political clout of Big Tobacco, Big Pharma or Big Bombs.

These companies are all part of the MIC Coalition (or are members of other lobbying groups that are).  The MIC Coalition is all about this new “government list” that’s supposed to protect small business by crushing small business.

Here’s the pitch on the government database from the MIC Coalition:

The lack of an authoritative public database creates problems for venues and small businesses including restaurants, taverns, wineries, and hotels. For example, venues are declining to host live musicians rather than risk potential liability due to lack of up-to-date and actionable licensing information. The lack of a database is also a challenge for local broadcasters and digital music streaming services that rely on accurate copyright information to provide music to millions of consumers.

The assumption behind this legislation is that if the government just forced songwriters and artists to register in the government’s list, that music users would actually use that database.  If there’s one common theme in the recent lawsuits against digital services it is that the services don’t seem to use the available data–except to file millions of mass statutory licenses using a loophole in the Copyright Act claiming the users can’t find the copyright owner of the songs they use in the current Copyright Office records and seeking the government’s cover from lawsuits as if they were legitimate users.

If they put the same effort into finding the songwriters that they do into filing millions of mass NOIs, these services might not have so many problems.  And instead of removing the loophole, the government now floats this “government list” database idea to create an even more complicated loophole at taxpayer expense.

Reject the 11th Century Solution to a 21st Century Problem

It’s important to realize two key causes for the licensing mess the government has created through over-regulating songwriters, one of which is not entirely the government’s fault.

The Government Should Allow Statutory Licensing by ASCAP and BMI:  Because the government imposes a near-compulsory license through consent decrees against songwriters who are members of the two largest performing rights societies (ASCAP and BMI), a perfect opportunity to streamline the compulsory license is simply lost.  ASCAP and BMI are prohibited from engaging in compulsory licensing.  If these PROs were allowed to issue licenses for all the rights digital services need, that would be a meaningful step forward.

This would make ASCAP and BMI similar to SESAC which can issue both performance rights licenses and mechanical licenses after SESAC’s acquisition of the Harry Fox Agency.  SESAC is not subject to a consent decree.  The MIC Coalition didn’t like that either and complained to the Department of Justice seeking an investigation into stopping an idea that could work.

Require Music Users to Search the PRO Databases for Song Ownership before Serving Address Unknown Mass NOIs at Taxpayer Expense:  There is nothing in the “government list” bill that actually requires music users to search or document that they have searched this new database.  Current law requires a search of at least the Copyright Office records (which Amazon, Google, Pandora, Spotify, Microsoft, iHeart and others are supposedly doing already by the millions) and in some circumstances permits a search of the performing rights society databases as well (see 37 CFR Sec. 201.10 h/t Richard Perna).

It is a short leap to require music users to search the publicly available databases of ASCAP and BMI as well as the public records of the Copyright Office before serving millions of address unknown NOIs on the Copyright Office.  This will be particularly relevant given the recently announced voluntary cooperative effort between ASCAP and BMI to combine their repertory databases (which could include other PROs).  While there is some complaining from MIC Coalition members that ASCAP and BMI won’t indemnify users of their databases for the accuracy of the data.

That simply isn’t true for parties to the ASCAP and BMI licenses, which after all is why the databases are created in the first place.  Since ASCAP and BMI have no idea what use anyone may make of the data and if that use is even authorized by the song or recording owners, how could they possibly be expected to indemnify all users for any use in any country of any song?  Those databases are not a search engine.  Nobody else does that, especially not search engines, e.g., Google’s disclaimer:

Our Warranties and Disclaimers

We provide our Services using a commercially reasonable level of skill and care and we hope that you will enjoy using them. But there are certain things that we don’t promise about our Services.

OTHER THAN AS EXPRESSLY SET OUT IN THESE TERMS OR ADDITIONAL TERMS, NEITHER GOOGLE NOR ITS SUPPLIERS OR DISTRIBUTORS MAKE ANY SPECIFIC PROMISES ABOUT THE SERVICES. FOR EXAMPLE, WE DON’T MAKE ANY COMMITMENTS ABOUT THE CONTENT WITHIN THE SERVICES, THE SPECIFIC FUNCTIONS OF THE SERVICES, OR THEIR RELIABILITY, AVAILABILITY, OR ABILITY TO MEET YOUR NEEDS. WE PROVIDE THE SERVICES “AS IS”.

SOME JURISDICTIONS PROVIDE FOR CERTAIN WARRANTIES, LIKE THE IMPLIED WARRANTY OF MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE AND NON-INFRINGEMENT. TO THE EXTENT PERMITTED BY LAW, WE EXCLUDE ALL WARRANTIES.

If the government wants to tinker with the Rube Goldberg system of music licensing that it has imposed on songwriters, it could start by making these two changes before imposing a 21st Century version of William the Conqueror’s Domesday Book, the Great Survey of England conducted in 1088.

Oh, and if they’re so fired up about forcing people to do things through regulation, why not force music users to license, pay and account in compliance with the law.