Tag: Mechanical Licensing Collective

@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 

 

Press Release: Songwriters Guild of America Lauds US Copyright Office’s Announcement of Strict Oversight Approach to the MMA Music Licensing Collective

Songwriters Guild of America Lauds US Copyright Office’s Announcement of Strict Oversight Approach to the MMA Music Licensing Collective

Independent Music Creator Organizations Look Forward to Working with Copyright Office in Protecting Songwriter and Composer Rights

July 8, 2019, New York City–The Songwriters Guild of America, Inc. (SGA), the nation’s largest and longest established advocacy organization run solely by and for music creators, has announced its support for the strict oversight approach adopted by the US Copyright Office this week in naming the consortium led by the major, multi-national music publishers as the official Music Licensing Collective (MLC) under the Music Modernization Act.  The Copyright Office made clear, as requested by SGA in recently filed comments, that it intends to take an active role in reviewing the activities of the MLC in light of the potential conflicts of interest inherent within a board of directors that will include major music publisher representatives.

Under the Act, the MLC is charged with identifying the rightful owners of hundreds of millions of dollars in unmatched streaming royalties.  Those royalties that cannot be tied to particular owners, according to the law, will eventually be distributed to music publishers on a market share basis.

“Obviously,” according to songwriter and SGA president Rick Carnes,  “under such circumstances you need an independent, outside overseer to make sure that those potentially conflicted board members who would benefit from the MLC doing a lax job in identifying the proper copyright owners do not utilize their positions to pursue unjust enrichment of their companies, despite the best efforts of songwriters, composers and truly independent music publishers on the board to achieve equitable results.”

In specifically citing SGA’s comments that meaningful oversight is an imperative under the law, US Register of Copyrights Karyn Temple concluded that “[t]he Copyright Office has been provided with ‘broad regulatory authority’ to conduct proceedings as necessary to effectuate the statute with the Librarian’s approval.  In addition to the regulations that the Office is specifically directed to promulgate, the legislative history contemplates that the Office will ‘thoroughly review’ policies and procedures established by the MLC….The Office intends to conduct its oversight role in a fair and impartial manner; songwriters are encouraged to participate in these future rulemakings.”

SGA had noted in its comments that it was “far more concerned with ensuring that music creator rights are fully protected against conflicts of interest and impingements upon the rights and interests of songwriters and composers under all circumstances, than in supporting one or the other candidate vying to be selected as the Mechanical Collective.”  The organization is satisfied with the Registers’ recognition of the Copyright Office’s oversight opportunities and obligations, and very much looks forward to working side by side with the Office on various issues concerning MLC policies and actions.

Carnes closed by stating, “for over 85 years, SGA has operated with a two-word mandate: ‘Protect Songwriters.’  And that applies to the rights of both American and foreign music creators.  Congress intended, and the president’s signing statement confirmed, that the Copyright Office is to play a key role in pursuit of that same protective mandate. The Copyright Office’s stated willingness and obvious ability to accept that challenge is very encouraging, and SGA –with the welcome participation of many of its fellow songwriter organizations in the Music Creators North America (MCNA) alliance and MCNA’s affiliated, global music creator advocacy groups– intends to do all within its power to assist it in doing so.”

Carnes also noted that in the event that it proves necessary to take further appropriate action, for example, to make certain that proper diligence is exercised by the MLC in attempting to identify copyright owners of unmatched royalties prior to distributing “permanently” unmatched royalties, or to ensure that contractual royalty splits with songwriters and composers are honored by publishers after receipt of unmatched royalties, “SGA is ready, willing and able to do that.”

SGA is also studying the issue of whether the statutes’ placement of limitations on damages for those plaintiffs who bring copyright infringement lawsuits after January 1, 2018 against digital music distributors is actually violative of the Fifth Amendment’s “takings clause,” rendering that section of the Music Modernization Act unconstitutional and unenforceable.

“SGA and the entire, independent music creator community have our work cut out for us,” he said. “But we are fully prepared to do whatever is prudent to protect the rights and interests of songwriters and composers and look forward to working closely with the US Copyright Office and the entire music creator community in doing so.”

The member organizations of Music Creators North America, of which SGA is a founding member, have endorsed this statement.

Songwriters Guild of America, Inc.
210 Jamestown Park Road
Brentwood, Tennessee 37027

@HeleneMuddiman: Founding SONA Member, Top Composer Breaks Ranks to Support the AMLC — Here’s Her Statement

[After Zoe Keating’s important post on how unrepresented songwriters are ill-served by the “consensus” mechanical licensing collective as proposed, SONA member Hélène Muddiman breaks ranks and makes an impassioned plea for fairness out of concern for the reportedly billion dollar black box that is becoming an increasing focus.]

Time is running out!

This is a truly momentous time in the history of music copyright.

Fellow composers and songwriters, and those who rely upon us for their living, our Digital Mechanical Royalties are about to be collected by a new Mechanical Licensing Collective (MLC).  There are billions of dollars at stake already, and billions more as the future moves towards on-demand streaming platforms where mechanical royalties become big business.

It’s confusing, because not everyone may realize that there are two submissions vying for the job of the MLC, which will collect and distribute these billions of dollars.

The NMPA-led application actually calls itself ‘The MLC,’ but it is not yet the MLC.  The Copyright Office is asking for comments to help it decide whether to appoint the indie-led submission instead, called the AMLC (or American Mechanical Licensing Collective).

The Copyright Office could very well choose the AMLC if creators from around the world send in their comments to influence the decision before April 22nd (please use this link: https://www.regulations.gov/comment?D=COLC-2018-0011-0001).

Read the post on Digital Music News

As best we can tell from the outside looking in, this chart has the dates for key events in the critical path to launch for the Mechancial Licesing Collective as required by the Music Modernization Act–the “Countdown to Modernity.”

This chart is a work in progress, and if anyone sees anything wrong in it or something that should be clarified or corrected, please let us know.  It should be considered a draft, but we hope that it will solidify over the next few weeks.

To our knowlege, no one else has published a chart like this.  The main takeaway from this chart should be the clock is ticking and time is going by.  Our prediction?  Time will become the MLC’s biggest enemy, if that hasn’t already happened in the drafting of the Music Modernization Act.  What we don’t see in the MMA is any discussion of what happens if a deadline is blown for whatever reason.

But mark your calendars–we see the first key date as January 7, 2019.  That’s 64 days from now and holidays count.

ARTIST RIGHTS WATCH
COUNTDOWN TO MECHANICAL LICENSING COLLECTIVE LAUNCH
WEEK 4

KEY DATES SCHEDULE FROM ENACTMENT DATE (10/11/18)

TO LICENSE AVAILABILITY DATE (1/1/21)

EVENT ACCCOMPLISHED WHO OWNS? TIME EXPIRED   BEFORE LAD TIME REMAINS TO LAD
REQUEST FILING TO BE MLC STATUS UNKNOWN—Deadline  1/7/2019 COPYRIGHT OFFICE 90 DAYS 726 days
DESIGNATION OF MLC STATUS UNKNOWN—Deadline  7/7/2019 COPYRIGHT OFFICE 270 days 545 days
FORMATION OF MLC NONPROFIT STATUS UNKNOWN MLC 4 weeks 112 weeks and 5 days
SUBSTITUTION OF BLANKET LICENSE FOR ALL EXISTING COMPULSORY LICENSES AUTOMATIC 1/1/2021 COPYRIGHT OFFICE 789 days
MLC BUDGET STATUS UNKNOWN

(Assume deadline of 1/7/19)

 MLC/DLC/CRJ 112 weeks and 5 days
INITIATE ASSESSMENT PROCEEDING w/CRJs [MUST COMMENCE NO LATER THAN 7/7/2019]

STATUS UNKNOWN

 MLC/DLC/CRJ 271 days 545 days
ASSESSMENT RULING [PUBLISHED IN FR NO LATER THAN 7/7/2020] MLC/DLC/CRJ 637 days 179 days
APPEAL OF ASSESSMENT RULING 30 DAYS AFTER PUBLICATION OF ASSESSMENT RULING MLC/DLC/CRJ/ DCCOA 667 days 149 days
MLC BUSINESS PLAN STATUS UNKNOWN

(Assume deadline of 1/7/19)

 MLC/CO 90 DAYS 726 days
ANNOUNCED BOARD NOMINEES STATUS UNKNOWN

(Assume deadline of 1/7/19)

 MLC 90 DAYS 726 days
APPOINTED BOARD STATUS UNKNOWN

(Assume deadline of 1/7/19)

 MLC/CO 90 DAYS 726 days
APPOINTED DLC STATUS UNKNOWN—Deadline  7/7/2019 COPYRIGHT OFFICE 270 days 545 days
ENGAGED VENDORS STATUS UNKNOWN

(Assume deadline of 1/7/19)

 MLC 90 DAYS 726 days
PAID VENDORS STATUS UNKNOWN (ASSUME 7/7/2020 IF NO APPEAL OF ASSESSMENT) MLC 270 days 545 days
ANNOUNCEMENT OF DATA STANDARDS STATUS UNKNOWN MLC/DLC
REGULATIONS* STATUS UNKNOWN CO
COMMENTS AND REPLY COMMENTS ON REGULATIONS STATUS UNKNOWN Songwriters and Publishers
EXPLANATION OF OPERATIONS: HOW TO REGISTER WITH MLC AND COST OF REGISTRATION STATUS UNKNOWN

(Assume deadline of 1/7/19)

 MLC/CO 90 DAYS 726 days
REGISTRATION START DATE STATUS UNKNOWN

 

MLC=Mechanical Licensing Collective

DLC=Digital Licensee Coordinator

CRJ=Copyright Royalty Judges

DCCOA=District of Columbia Circuit Court of Appeals

CO=Copyright Office

LAD=License Availability Date

*Topic areas to be updated as announced

via COUNTDOWN TO MODERNITY (11/5/18)–The Progress to Production Chart for the Mechanical Licensing Collective — Music Technology Policy

@andreakayeshow: More socialism is not the right note for music industry reform

[Editor Charlie sez:  Fasten your chin straps, free marketeers are starting to come out against the Mechanical Licensing Collective part of the Music Modernization Act.]

Rather than foster the growing marketplace addressing this complex issue, the bill imposes a Washington top-down approach that ostensibly benefits crony lobbyists and corporations while short-circuiting creative innovators.  It is a classic example of a backroom swamp deal that robs Peter to pay Paul.  In this case, Peter is the American people, and Paul is the biggest crony actors in the music industry.

Read the post on American Thinker