@schneidermaria: The Music Modernization Act – The Devil is in the Details

[Editor Charlie sez: A spectacular and detailed critique of the Music Modernization Act by Maria Schneider the five-time GRAMMY-winning composer and bandleader.]

When it comes to the newly introduced bill called the Music Modernization Act (the “MMA”), there’s good news and bad news.

First, I want to offer some good news.  Many lawmakers from both sides of the aisle appear to be finally waking up to the fact that, in the absence of updated copyright laws, present-day technologies are destroying the livelihoods of music creators, especially workaday creators.  Our elected leaders recognize that changes in the law need to be made.  I think I speak for most music creators in saying, we are very grateful for that.  We are grateful, because the big data companies (like Spotify and YouTube) and the big publishing/record companies (like Sony/Warner/Universal, who have equity in Spotify) have been systematically destroying the ability of most workaday music creators/musicians to make a living.  So, there’s a new bill in the works, that on its face, might seem good – good enough that many are touting it.  It would insure that a stream pays a mechanical.  In theory, that would indeed be great news, and many of our lawmakers, and many in our industry have initially backed this bill.

But now, I need to report the bad news.  The MMA was drafted primarily by lobbyists for the huge corporations that control the music industry.  The MMA is over 100 pages long, and is “Exhibit A” for why people hate lobbyists and lawyers so much.  When you dig into the carefully worded text (which I now have), it becomes very clear that the MMA is the result of cunning drafting that even further protects and insulates the all-powerful publishers and the big data companies.  They’ve paved their own 4-lane highway to drive their Mack trucks over music creators yet again.

Let’s not forget that the copyright rights of all creators, workaday and hugely successful, are so important, that the drafters of the Constitution protected them right in the Constitution itself.  But as I’ll explain in detail below, the MMA basically “outsources” the management of music copyright rights to two separate, “to-be-created” private corporations that will be entirely controlled by these very all-powerful industry players.  That’s like outsourcing the environmental protection from oil spills to a private corporation controlled by BP and Exxon.

Here’s the outsourcing scheme the lobbyists driving the MMA have created: a newly-formed Corporation A will administer the payment of a streaming mechanical royalty that will be implemented, and Corporation B will essentially serve as the tax collector, seeking “assessments” from industry to pay for Corporation A’s activities.  Even if it’s high time for a streaming mechanical, and if the outsourcing of something so important as the management of music copyright must be done, it should be done in a “bullet proof” manner, where the public’s interests, and music creators’ rights, are fully and carefully protected.

Read the post on MusicTechPolicy

Music Creators North America Letter to Congress Critiquing Issues in Music Modernization Act

[Editor Charlie sez:  After the many letters from songwriter organizations, it is looking like what The Bible described as the “full throated endorsement of licensing reform” was more like a throat full of cram down by Big Tech–and their search for yet more loopholes and even safer harbors.]

MUSIC CREATORS NORTH AMERICA

February 1st, 2018

Dear Chairman Goodlatte and Ranking Member Nadler:

Thank you for the opportunity to submit these comments for the record of the House  Judiciary Committee field hearing, “Music Policy Issues: A Perspective From Those Who Make It,” held in New York City on January 26, 2018. They are submitted on behalf of Music Creators North America (MCNA), an alliance of music creator organizations that represent the rights and interests of composers and songwriters, principally in the United States. Each of MCNA’s member organizations is run exclusively by and for music creators. As such, MCNA is the pure voice of North American music writers and, through our global alliances, a half-million songwriters and composers around the world.

For the sake of clarity, however, this submission should be regarded as principally representing the view of MCNA’s thousands of American members, rendered with the full support of the MCNA-aligned international music creator community.

Specifically, we would like to address issues concerning the Music Modernization Act (HR. 4706). In doing so, we want to stress that MCNA and its coalition partners enthusiastically support the principles underlying HR 4706, and wish once again to thank Representatives Doug Collins, Hakeem Jeffries, and the other co-sponsors of the bill for their hard work and devotion to the cause of protecting the creative community.

We note that, at the January 26 hearing, several members of the Judiciary Committee asked the panelists a significant question that went unanswered. In the paraphrased words of Representative Demings, if, as some panelists indicated, the MMA is not perfect, how can it be improved? Since none of the panelists addressed that important inquiry in detail, we would like to take this opportunity to draw to the Committee’s attention three crucial clarifications, among a number of concerns, that would give great benefit and comfort to the community of American songwriters and composers, issues we very much hope to discuss with the Committee’s Members prior to mark-up.

Chief among them is the selection of the members of the boards of the proposed Collective, both the number of seats allotted to songwriters and composers and the election process to fill those seats. As you and the members of your Committee well know, Article I, Section 8 of the United States Constitution recognizes the rights of authors and inventors and empowers Congress to protect those rights. The work of songwriters and composers (i.e. authors) is the foundation on which rests the entire music industry, the business of commercial entities that distribute music, and the enjoyment of music fans.

While songwriters and composers are free to engage in contractual relationships with publishers, record companies, and a wide variety of representatives covering other aspects of their careers, US copyright law gives most creators them the unfettered right to control their work from inception.

As the creators of these foundational works, we are simply seeking an appropriate voice in their exploitation. In order to ensure that our voice is truly heard, it is of crucial importance that the legislation provide the songwriter and composer community (as distinguished from, for example, those who administer our rights) with a democratic means of selecting a number of board members equal to those of music publishers and other administrators. These should be knowledgeable, independent, and unbiased music reators capable of ensuring in a cooperative way the protection of our rights and interests. We believe that the details of such a process can be arrived at with the cooperation of our colleagues in the music publishing community, and we look forward to that opportunity.

The second issue is a simple clarification in the “Songwriter Payments” provisions found on page 40, line 17 of HR 4706. In order to ensure that music creators get the full benefits of their contracts with music publishers, we believe that very concise language can be added for clarity to ensure that—as intended by all parties—the distribution of unmatched royalties is made by the Collective and by music publishers on a designated, per title basis. Without this language, it may be possible for a music publisher or administrator to pay such royalties to music creators at rates significantly below those set forth in their contracts. We will be happy to provide draft language in that regard if the Committee deems it appropriate.

The third issue concerns the integrity and structure of the mandated database,specifically, the vital inclusion of unique creator identifiers. As you are most likely aware, many music creators make relatively frequent changes in their contractual relationships with publishers, administrators, and others. (This, of course, is one of the frustrating situations with which music users must deal when seeking licenses.) But the name and, therefore, the identifying information of the creator of a composition, never changes. Therefore, for data accuracy and accessibility for music users, music publishers, and music creators to be fully realized, a creator’s number should be recorded on every musical composition in the database stipulated in HR 4706. This will greatly enhance the ability of individual music creators to identify their works, especially those compositions still unmatched, so that they can claim royalties for their uses.

We are pleased to report that discussions of these issues are underway between and among members of the music community. We ask for the Committee’s assistance, indulgence, and encouragement to allow this process to move forward prior to mark-up.

Thank you, Chairman Goodlatte and Ranking Member Nadler, for all you have done forthe American music creator community and the protection of copyright. We are grateful to have been provided with the opportunity to expand and clarify the record on these important issues. We look forward to working with you and the Committee to ensure that this enormously important piece of legislation is the very best bill it can be.

Sincerely,

David Wolfert

For Music Creators North America (MCNA)

cc: Members of the Committee on the Judiciary, United States House of Representatives

For a listing of MCNA Members and Associates, please refer to the website: www.musiccreatorsna.org

Welcome to the Post-Copyright Era! @digitalmusicnws: Indie Songwriters Feeling Left Out as the ‘Music Modernization Act’ Moves to the Senate

[Editor Charlie sez:  Great analysis from Paul Resnikoff on the catastrophic Music Modernization Act, the first legislation of the post-copyright era.]

The ‘Music Modernization Act’ is being heralded as groundbreaking legislation for music and tech.  But indie songwriters and publishers feel like they’re getting the shaft.

Most music industry bills face brutal deaths, outmatched by stronger, smarter opponents.  The RIAA has been flopping on the Hill for decades, despite seven-figure salaries and pricey DC offices.

Somehow, opponents like Google and broadcast radio always seem to win.

All of which makes the ‘Music Modernization Act’ a surprising change.  Instead of another uphill battle, this bill has support from both sides, including Spotify and the tech lobby.  Major publishers, represented by longtime NMPA honcho David Israelite, are all voting yes.

Similarly, major labels are also on board, thanks partly to their significant equity stakes in Spotify.

The big three demanded those shares years ago, and now, the parties are mutually aligned.  A smashing Spotify success on Wall Street could bring billions to the balance sheets of Universal, Warner and Sony, not to mention continued royalty streams.

It’s a cigar fat enough for everyone to puff.

Accordingly, the Music Modernization Act puts away a pesky royalty nightmare for Spotify.  Instead of having to fight billions in publishing lawsuits, the Act draws a forgiveness line in the sand.  And forget about the troubled HFA — this bill calls for a brand-new collection system that will be created by the platforms themselves.

It’s a new, simple structure for paying publishing royalties and tracking rights owners — without the legal fees, class actions, and bad press.

Sounds great — unless you’re an independent publisher or songwriter.

Read the post on Digital Music News

EU Composer & Songwriters Alliance Questions “Serious Problems” With Music Modernization Act

European Composer & Songwriter Alliance
Stockholm, Brussels

30 January 2018

Congressman Doug Collins
1504 Longworth House Office Building
Washington, DC 20515

COPY:

Ambassador David O’Sullivan
Delegation of the European Union to the United States
2175 K Street NW.
Washington. DC 20037

Crispin Hunt Chair
British Academy of Songwriters, Composers & Authors
2 Pancras Rd, Kings Cross, London
United Kingdom

VIA EMAIL

SUBJECT: Music Modernisation act

Dear Representative Collins,

We write you from the European Composer and Songwriter Alliance, Europe’s largest songwriter’s organisation representing creators from 27 European countries. Our British member BASCA, copied to this letter, who represents songwriters such as Sir Paul McCartney, Coldplay or Annie Lennox encouraged us to contact you in a matter of mutual concern.

We learnt that you proposed a new bill – the Music Modernization Act – which shall, in essence, establish a new collective licensing entity providing a blanket license for the mechanical right for online streaming services operating in the US. We are advised that whilst your bill does not expressly authorize the new collective from also licensing the performing right, it also does not expressly prohibit the collective from doing so

As you may know, European repertoire accounts for up to 25% of the Top 100 songs played on US radio stations.  We therefore follow with great attention copyright legislation in the US, being one of the biggest markets for European songwriters and we understand that the new collective licensing entity will also govern all foreign repertoires, including the European one.

We join our US colleagues in believing that the reform of the music licensing process is and must continue to be an exceptionally high legislative priority – especially the need to raise music royalty rates to equitable levels to sustain the songwriter community.

Whilst there are many good points about the draft bill, we also join the views voiced by the Songwriters Guild of America (SGA) in an open letter to you dated 21 December 2017: there are a number of very serious problems set forth in the bill and in general we believe, that  the bill rather  favours the interests of the multi-national publishers, rather than those of individual, hardworking songwriters. Please allow me to respectfully remind you that the latter are the very justification of copyright law to exist as legal institution. In turn, publishers mainly represent their own interests, which are not necessarily congruent with those of contracted songwriters.

Just by way of example, in Europe, collective management entities are governed by songwriters, who hold a 70% majority on boards of those entities. We cannot accept a concept that sets out that a board of directors of a new collective rights management entity, providing blanket licenses of mechanical rights for the entire US territory, which is governed by eight publishers versus only two songwriters who must be “self-published” at that. How can such an arbitrary governance structure ensure that the legitimate and vital interests of individual creators are well represented by vis-a-vis multi-billion publishing companies, particularly when there is no other oversight?

Respectfully, there are many other problems with the essential lack of fairness in the bill, which are too numerous to detail in a short letter. By example. one other obvious flaw is the distributing of unidentified monies on a market share basis. How can the market share, which in too many historical instances is acquired on dubious grounds in the first place, justify a blanket pay-out of un-matched royalties? Because the bill establishes a two-tiered system allowing major publishers to essentially opt-out of the collective with a direct license, the bill inexplicably distributes unidentified monies using the market share of those publishers who will not otherwise be administered by the collective and will not likely be included in the pool of unidentified monies.

A few other questions that are of concern to songwriters: Where is the business plan for the collective? A century of practice is to be changed without even a business plan that the governed have a chance to review? And what justifies the denial of statutory damages? And how is the board of directors elected? Finally, why should companies directly licensing online music service providers be eligible for membership on those boards? And how will cooperation with foreign CMO’s be handled, also in terms of data exchange? ·

We appreciate that the introduction of a bill is simply a first step. We trust that you will carefully review the bill and take our views into account. We will do our best to provide you with a more detailed comment in the coming weeks. Meanwhile, should you have any questions, please don’t hesitate to get back to us.

Thank you for your kind consideration.

Alfons Karabuda
President

Patrick Ager
Secretary

hypebot: What is the Music Modernization Act and Who Supports It?

[Editor Charlie sez:  Hypebot is carrying a must-read week-long feature presenting both sides of the Music Modernization Act entitled “Music Modernization Act: Peril or Promise”.  The first installment gives an overview of the bill and a headcount of who supports it.]

It would be easy to believe that the Music Modernization Act has universal support. Twenty-three major music industry trade groups and companies have endorsed the MMA, including the RIAA, A2IM, NMPA, BMI, ASCAP and SoundExchange. The Internet Association which represents Google, Amazon, Microsoft, Spotify and more that thirty other major tech companies has also signed on. Even the National Association Of Broadcasters, which initially opposed the legislation, has  announced its support, after meetings with the performing rights organizations.

“The recorded music industry speaks with one voice in support of the Music Modernization Act and to further rationalize copyright law.,” said A2IM CEO Richard James Burgess. “This legislation brings us one step closer to our goal of creators and copyright owners being compensated fairly for all uses of their work. We urge Congress to move forward on these important reforms, to seek market rates for all music streaming, and to demand that American artists be paid for terrestrial radio performances.”

The large print giveth and the small print taketh away.”

But support for the Music Modernization Act is not universal.

Read the post on Hypebot

@hypebot: Under Music Modernization Act Songwriters Lose Unclaimed Royalties, Meaningful Ability To Litigate

[Editor Charlie sez:  Hypebot is carrying a must-read week-long feature presenting both sides of the Music Modernization Act entitled “Music Modernization Act: Peril or Promise”.  Today’s installment is by Nicole Haff and Cassie Daum.]

On December 21, 2017, the Music Modernization Act of 2017 (H.R. 4706) was introduced in the House of Representatives.  The bill seeks to modernize the U.S. music licensing system by (1) creating a not-for-profit mechanical licensing and royalty collective to collect and distribute mechanical royalties from interactive streaming services, such as Spotify, Apple Music, Pandora, Google Play Music, Tidal, and others, (2) requiring Copyright Royalty Judges to establish rates and terms that would have been negotiated in the free market between a willing buyer and willing seller by examining economic, competitive and programming information, such as the rates that recording artists earn, and (3) changing the rate court procedure for ASCAP and BMI, the two largest performing rights organizations in the U.S., by randomly assigning federal court judges from Southern District of New York to each rate setting proceeding.

“smaller publishers and musicians may be surprised”

While many in the music industry welcome this bill, smaller publishers and musicians may be surprised to learn that several of the provisions in the Music Modernization Act may harm their interests.

Read the post on Hypebot

Another Artist Rights Lawyer Warns Against the Music Modernization Act Safe Harbor

[Law 360 covered the Music Modernization Act, featuring a quote from Robert Allen, a leading artist rights litigator critical of the new safe harbor that a growing chorus challenges as unconstitutional because it retroactively takes away rights songwriters are entitled to under the statutory damages rules of the Copyright Act:]

Notably, for digital services that play by the new rules, the bill would give them strong legal protections against past infringements. In any lawsuit filed after Jan. 1, 2018, against a complying service, plaintiffs can only recover the royalties owed under the new system, not damages for infringement.

It was that provision, according to media reports, that prompted the music publisher representing Tom Petty and others to sue Spotify over unpaid mechanical royalties on Dec. 29, just days before the proposed deadline.

Such indemnity was almost certainly an inducement designed to get the Digital Media Association— the group that represents Spotify, Pandora and other streaming services — to support the legislation, but Robert E. Allen, a principal at McKool Smith PC and a veteran music publishing attorney, said the provision went much too far in forgiving past behavior.

“I think that’s completely unfair to songwriters,” Allen said. “It gives these services a pass for their past misconduct.”

Read the post on Law360

Robert Allen joins the “Future of U.S. Mechanical Licensing” panel for SXSW in March.