@Eamonn_Forde: THE COLLECTIVE CORRECTIVE: UK INDUSTRY LEADERS WEIGH IN ON THE CHALLENGES FACING THE MLC

[Editor Charlie sez:  Remarkably balanced post for a trade paper, considering, about very high level issues with MLC.  Not the usual fearful rah rah please don’t hit me.]

The MLC (Mechanical Licensing Collective) is, depending on who you speak to, one of many things: for some, it’s both the future and the saviour of digital music licensing online for publishers; for others, it’s a well-intentioned pipe dream that, like Bambi on the frozen pond, probably will not have the legs to support its upper body weight; and for the more cynical, it’s a furnace into which tens of millions of dollars will be tipped and all we’ll get at the end is soot and ash.

Let’s start, however, with the facts of the matter, explaining why it was set up, what it wants to achieve and how it says it will go about achieving that.

It was established to issue and administer blanket mechanical licenses for the streaming and downloading of musical works on DSPs. The MLC will also collect the due royalties and distribute them to songwriters, composers, lyricists and music publishers. It was brought into being after the Music Modernization Act (MMA) was signed into US law in October 2018 and, as dictated by the US Copyright Office, had to submit its proposals to the Copyright Royalty Board to outline its structure, goals and funding.

The MLC operates as a non-profit (i.e. it does not take a cut on the royalties it brings in and distributes) and will be funded by the DSPs who secure their blanket licenses through it. It has $37.25m to get it up and running and will receive an initial $29m a year when it is operational and issuing its blanket licenses.

Read the post on Synctank

For reference, read the recently granted emergency powers of the head of the U.S. Copyright Office which include extending the date of the fully-funded, no excuses delivery schedule of the MLC.  Gee, we are just so confused about how that power managed to get included in an 800 page bill.  Here it is:  “If the Register adjusts the license availability date, the Register must provide the statement to Congress…at the same time as the public notice of such adjustment with a detailed explanation of why such adjustment is needed.”  So this is how they’re going to do it.  They’ll do it by fiat, no public comment required from the little people.  Just remember–civil libertarians still talk about how President Lincoln suspended habeas corpus during the Civil War.

 

@CopyrightOffice: Next Steps in the Music Modernization Act

[Editor Charlie sez:  Where is the olive branch from MLCI to AMLC?]

Under the Music Modernization Act (MMA), we now have a new system for licensing musical works that should help ensure the songwriters behind our favorite tunes can be properly identified and paid. And as part of the implementation of this historic law, just last week, the Copyright Office designated the Mechanical Licensing Collective, Inc. (MLCI) as the approved entity to implement key aspects of this new system, and the Digital Licensing Collective, Inc. (DLCI) to represent the interests of digital music services. Pursuant to the MMA, the MLCI will receive notices and reports from digital music providers, collect and distribute royalties, identify musical works and their owners for payment, and develop and maintain a publicly available database of musical works.

In designating the MLCI, the Office highlighted the support for the entity among musical work copyright owners and the organization’s projected ability to carry out the administrative and technological functions necessary to implement the law. The Office also highlighted the MLCI’s commitment to diversity in carrying out its duties. As part of its submission to the Office, the MLCI offered a detailed operational framework, reflecting substantial planning with respect to organizational structure, vendor selection, and collection and distribution procedures of royalties. At the same time, the Office appreciated the important submission of the other entity seeking to be designated, the American Music Licensing Collective (AMLC), and recommended that the MLCI consider whether aspects of the AMLC’s proposal should be incorporated into the MLCI’s future planning. Now that the designation process has been completed, the expectation is that the MLCI will fairly and equally represent the interests of all parties, including those who did not previously endorse it, and that key players such as the DLCI and the MLCI will build upon the cooperative spirit facilitated by the MMA’s passage to work together to make the implementation of this historic new licensing scheme a success.

Following designation, the Copyright Office will now turn toward ensuring that the proper regulatory procedures are in place prior to the upcoming license availability date of January 2021, when the new system will be fully operational. Over the next several months, we will begin rulemakings relevant to the MMA, as well as substantial public outreach, including a tutorial explaining the basics of the new law, a webinar, updated educational circulars, and presentations at music industry conferences. We encourage interested parties to check back on our website regularly for updates.

Read the post on the Copyright Office blog.

@CMU Confirms: The Arlen Case Proves Again that On the Internet, It’s Always Someone Else’s Fault

DOROTHY

If you were really great and powerful you’d keep your promises!

from The Wizard of Oz, written by Noel Langley & Florence Ryerson and Edgar Allan Woolf, adapted from the book by L. Frank Baum

In an interesting twist, Complete Music Update has actually criticized songwriters when Spotify wasn’t sued.  (Or at least wasn’t sued yet.)  Yes, it’s true; sometimes man really does bite dog.  In that post about the recent case of SA Music LLC and Harold Arlen Trust LLC v. Apple, Inc., Amazon.com, Inc. and others, CMU may be demonstrating exactly what their motivation was behind attacking music publishers in their most reason consulting pitch.

Harold Arlen was a very successful songwriter, probably most famous for Somewhere Over the Rainbow from The Wizard of Oz.  (That song is not included in the lawsuit, probably because the studio owns the copyright.)

The Arlen case turns on a fundamental point:  The government won’t save you with a compulsory license for the reproduction of a sound recording if you didn’t have the rights in sound recording in the first place.  Simple, simple stuff.

But as it turns out, some of the services including CMU’s beloved Spotify, did get a fake license for at least some of Mr. Arlen’s songs at issue by sending an address unknown notification to the Copyright Office claiming that the Copyright Office records did not identify the owner of the song copyright.  (A complex process spelled out here.)

And the Arlen plaintiffs provide a handy guide to finding the song copyright owner in the Copyright Office records in an exhibit to their complaint that lists the copyright registration numbers for their works.

You know–the kind of information you would find if you actually looked up the works concerned as is required to get the address unknown fake compulsory license and which each service represented that they did when the filed a notice.  (Apple never filed these notices.)

Take Stormy Weather, for example, one of the classic Arlen songs.   A quick search of the handy SX Works NOI Lookup database reveals that both Google and Spotify filed “address unknown” NOIs for the song.

Stormy Weather

And yet–here it is in the Arlen complaint, along with that pesky copyright registration number:

Stormy Weather Complaint

The presence of the copyright registration number shows that Mr. Arlen was in the Copyright Office public records and the format of the number shows that the registration was filed before 1978 for a published work.

And let’s make a side bet that you can rinse and repeat for each song in the complaint–all of them will be subject to an address unknown filing and all of them will have been registered.  Which means that whoever was filing the address unknown NOIs on the Copyright Office didn’t bother to look–and it also means that all of those improperly filed NOIs are invalid, and that’s before you even get to the question of whether the sound recordings were properly licensed.  (And because invalid, neither group is subject to the new MMA safe harbor.)

How could that be you say?  These are the cognoscenti of the modern world at Google, Amazon, Spotify, et al.  How could they have made this boneheaded mistake?

And although it’s not part of the lawsuit currently being heard before Judge John F. Walter in the California Central District, Mr. Arlen’s classic Somewhere Over the Rainbow from The Wizard of Oz also was too difficult for some services to findthey sent in address unknown NOIs on that song, too.

Somewhere Over the Rainbow

There’s actually quite a simple answer that may explain why the services made these mistakes.  The Copyright Office online lookup only covers registrations after January 1, 1978.  Registrations before 1978–you know, the core of American popular music and the bulk if not all of Mr. Arlen’s catalog–pretty much require a manual lookup.  Which means that the Reading Room of the Copyright Office would have been a very, very busy place for a while there with gnomes from the services or their licensing companies looking up pre-78 copyright registrations to identify the copyright owner.  Or they could just have relied on the licensing services that Amazon and Spotify used to do their clearance work, both of whom bray about the breadth of their respective databases.

Or you could just lie when you represent on your NOI filing that you have searched the Copyright Office records but were unable to locate the copyright owner.  These filers attest that they have looked for the copyright owner in the Copyright Office public records as required in the filing instructions:

In the case where the Notice will be filed with the Copyright Office pursuant to paragraph (f)(3) of this section, the Notice shall include an affirmative statement that with respect to the nondramatic musical work named in the Notice of Intention, the registration records or other public records of the Copyright Office have been searched and found not to identify the name and address of the copyright owner of such work.

This language is fixed in the government spreadsheet template for each NOI served on the Copyright Office.   Each service filing the NOI has marked “YES” in that column for each song in the notice.

Why is this a problem?  Just ask Martha Stewart what happens when you make a false statement to the government.

It has long been my contention that the services violated the law on a massive scale but no one seems too interested in finding out.  Mr. Arlen’s lawsuit or one like it may provide just the vehicle to find out where the fault lies for these apparently false filings.

And guess what–the new Music Modernization Act safe harbor won’t protect the services on this one, CMU’s whinging notwithstanding.  This is not a failing of the licensing system, this is the desire of the services to Do The Wrong Thing correctly.  It is a failure that highlights why whichever candidate is designated as the MLC should have new blood and not keep recycling the old.

CMU tells us:

Nearly all the streaming services have been sued at some point in recent years in the US for failing to pay all of the mechanical royalties that are due on the songs they are streaming. In most cases, this failure to pay was mainly the result of the woefully inadequate licensing system operated by the American music publishing sector.

Actually the failure to pay was mainly the result of failing…to…pay.  Ahem.

Technically a compulsory licence covers the mechanical rights in songs Stateside, so that the streaming services don’t need bespoke licences from each writer or publisher. [Not just “technically”…actually.]  However, they do need to send notices and payments to each rights owners of each song streamed for the compulsory licence to apply.

Because the streaming services don’t generally know what specific songs are contained in the recordings labels pump into their platforms – let alone who owns the rights in those songs – in some cases notices and payments were not sent.

“Some cases”?  Does 25% of the repertoire count as “some”?  Do tens of millions of “address unknown” NOIs count as “some”?

What the Arlen case helps us understand is that the services or their clearance companies sent address unknown NOIs on songs where the address clearly was known.  It also provides at least circumstantial evidence that the services may never have tried to identify the song copyright owner in the public records of the Copyright Office, even in cases where they knew the title of the song and the name of the songwriter and where the songs were classics that were very well known to music fans.

It also demonstrates that nobody was minding the store on the either the song side or the sound recording side of these services in their mad dash to get big fast and line their pockets while deflecting attention away from their own culpability.  And when something misfires as much as song licensing has–where services are not even using the available tools correctly–it definitely gives the lie to the licensing system being “woefully inadequate” because you can’t find what you don’t look for.

I think that the truth that Howard Arlen’s lawsuit may uncover is that we should disregard the iconic image that the media has created of Big Tech.  Once it became apparent that independent songwriters like David Lowery and Melissa Ferrick were prepared to sue to enforce their rights, things got out of hand and it was pretty clear from the way this was handled that these guys were just not that bright.

But pay no attention to the man behind the curtain because on the Internet it’s always someone else’s fault.

Selected Must Read Comments from the Indie Community to the Copyright Office on the Music Modernization Act

[Editor Charlie sez: ARW readers have probably seen the mainstream promotion for the two contenders to be the Mechanical Licensing Collective under the Music Modernization Act.  What you may not have seen is the commentary from the indie community.  The Copyright Office is currently soliciting input from the creative community about who would do a better job, “the MLC” supported by the National Music Publishers Association and their allies NSAI and SONA, or the American Mechanical Licensing Collective, backed by Zoë Keating, Stewart Copeland, Maria Schneider and many other songwriters.  The comment period closed on April 22 and all comments are now posted on the Regulations.gov website.  Following are selected comments and links that are important and raise many significant fairness issues as well as some business questions and legal hurdles that the MLC will ultimately need to get past.  It’s not that others aren’t also interesting to the extent they are not form comments to the “Registrar of Copyright”…sheesh…it’s just that you’ve probably heard it all before.]

DOCUMENT ID:    COLC-2018-0011-0017 (https://www.regulations.gov/document?D=COLC-2018-0011-0017)
DOCUMENT TYPE:  PUBLIC SUBMISSIONS
POSTED DATE:    04/23/2019
DOCUMENT TITLE: Schneider, Maria – Reply Comments

DOCUMENT ID:    COLC-2018-0011-0018 (https://www.regulations.gov/document?D=COLC-2018-0011-0018)
DOCUMENT TYPE:  PUBLIC SUBMISSIONS
POSTED DATE:    04/23/2019
DOCUMENT TITLE: Keating, Zoe et al. – Reply Comments

DOCUMENT ID:    COLC-2018-0011-0056 (https://www.regulations.gov/document?D=COLC-2018-0011-0056)
DOCUMENT TYPE:  PUBLIC SUBMISSIONS
POSTED DATE:    04/23/2019
DOCUMENT TITLE: SGA (Songwriters Guild of America) – Reply Comments

DOCUMENT ID:    COLC-2018-0011-0038 (https://www.regulations.gov/document?D=COLC-2018-0011-0038)
DOCUMENT TYPE:  PUBLIC SUBMISSIONS
POSTED DATE:    04/23/2019
DOCUMENT TITLE: MusicAnswers – Reply Comments

DOCUMENT ID:    COLC-2018-0011-0039 (https://www.regulations.gov/document?D=COLC-2018-0011-0039)
DOCUMENT TYPE:  PUBLIC SUBMISSIONS
POSTED DATE:    04/23/2019
DOCUMENT TITLE: Muddiman, Helene (pt. 1) – Reply Comments

DOCUMENT ID:    COLC-2018-0011-0040 (https://www.regulations.gov/document?D=COLC-2018-0011-0040)
DOCUMENT TYPE:  PUBLIC SUBMISSIONS
POSTED DATE:    04/23/2019
DOCUMENT TITLE: Muddiman, Helene (pt. 2) – Reply Comments

DOCUMENT ID:    COLC-2018-0011-0041 (https://www.regulations.gov/document?D=COLC-2018-0011-0041)
DOCUMENT TYPE:  PUBLIC SUBMISSIONS
POSTED DATE:    04/23/2019
DOCUMENT TITLE: Muddiman, Helene (pt. 3) – Reply Comments