@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.

@edchristman: Competing Groups Vying to Form Mechanical Licensing Collective Slam Each Other’s Proposals

[Editor Charlie sez:  Food fight in the cafeteria…]

While the two applicants vying to be named the group that will build the Mechanical Licensing Collective created by the Music Modernization Act (MMA) have thus far engaged in mudslinging at their competitors, in the comments to the Copyright Office filed Monday and posted Tuesday evening, each group let loose with both barrels in appraising the other’s proposal.

Read the post on Billboard

@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

Must Read Post by @zoecello on the MLC Selection: Unrepresented songwriters deserve to be heard

I took a few years away from artist advocacy (after my husband died of cancer) but recently I feel called to get involved again and I’ve joined the board of the American Mechanical Licensing Collective.

I’m not being paid to do this and I’m not on anyone’s payroll — I’m a single mom who makes a living as a recording artist and I hardly even have time to even write this — but I feel compelled to speak out because time is short and I don’t see anyone else doing it. I’ve always advocated for under-represented artists and done what I can to shine a light on the friction and roadblocks that we face in earning a living from our music. My interest in joining the AMLC is to get royalties to the people who earned them, as transparently and efficiently as possible.

This is wonky stuff but bear with me

Read the post on Medium

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

@MikeHuppe: SoundExchange President and CEO Michael Huppe Statement on Music Modernization Act

PRESS RELEASE

WASHINGTON, DC – September 18, 2018 – The SoundExchange family of music creators today applauded the long-awaited passage of the comprehensive Music Modernization Act by the U.S. Senate. SoundExchange issued the following statement from President and CEO Michael Huppe:

“The future of the music industry got brighter today. Creators of music moved one step closer to getting paid more fairly. And industry forces that fought to maintain an unfair and harmful status quo were rebuffed. Now, SoundExchange’s 170,000-member community has just one word for the House of Representatives: Encore.”

“The Music Modernization Act proves what can happen when constructive industry leaders work together towards a greater good. The SoundExchange community joined a historic coalition of artists, labels, songwriters, music publishers, streaming services, performance rights organizations, producers, engineers and unions. The outcome of this collaboration is a law that sets a new framework to guide the future of the music industry. There are still issues regarding creator fairness that we need to address, but today we celebrate a new era of cooperation and progress across the industry.”

SoundExchange will monitor the progress of the Music Modernization Act. Follow updates on our Twitter handle @SoundExchange.

@MikeHuppe: Bringing MMA Across the Finish Line

[From the SoundExchange blog]

by Michael Huppe, President and CEO, SoundExchange

The Music Modernization Act (MMA) now has the support of 76 Senators. As it nears the finish line, SiriusXM is going door-to-door in the Senate in a last-ditch effort to block the MMA, a bill backed by an historic coalition of thousands of music creators, songwriters, producers, labels, publishers and digital music services—all of whom have been working for years to get Congress to reform music licensing laws.

For longtime advocates, it will come as no surprise that SiriusXM is trying to scuttle the MMA at the last minute. This is, after all, precisely what they did 20+ years ago when Congress first enacted legislation giving performers the right to be compensated when digital services use their music. Back then, Sirius stepped in during the final throes of the legislative process to argue that having to pay for music—their primary product—could “disrupt” their nascent business plans. They argued for a special royalty rate–one that effectively forced artists to subsidize their business and gave them a competitive advantage against other companies.  That special treatment has gone on for over two decades ago now. We don’t think such a sweetheart deal was justified back then; but it’s indefensible now.

Once separate companies, SiriusXM is now the sole satellite radio company in the U.S. It generates revenue well over $5 billion annually, the huge majority of which comes from its more than 32 million subscribers. To put that into context, U.S. wholesale revenue for the entire record industry was $5.9 billion in 2017. Yes, a single company, SiriusXM, makes nearly as much from subscribers in the United States as all record labels and artists combined make from all sources.

Make no mistake about it: SiriusXM would not have a business without recorded music. And yet, SiriusXM has profited for decades by getting music at a special market distorting rate set under a different standard than all its thousands of internet radio competitors. Specifically, the rates set for internet radio are established under a “willing-buyer/willing seller” standard – another way of saying artists and labels are supposed to be paid a fair market rate for their recordings. When setting satellite radio rates, by contrast, the government can – and has – set rates lower than fair market value based on four amorphous policy factors. The impact is not academic: the lower rate standard has cost creators billions of dollars over the last 20 years.

Multi-billion dollar companies should not be subsidized by musicians – and all competing streaming platforms should play by the same rules.

Seems obvious right? It is, and that’s one of the reasons the Music Modernization Act passed the House of Representatives unanimously (as in 415-0; think on that for minute) and is on the verge of passage in the Senate.

The music community is united around the MMA because it ensures fair treatment for music creators and a level playing field for digital radio services. It is a win-win, and the compromises SiriusXM has proposed are inconsistent with the principles upon which the bill is centered. We look forward to the Senate moving this bill — and with it all of music — forward.