Legacy Recording Industry To Trump: Please Tell Tech Companies To Nerd Harder To Censor The Internet

from the feeding-right-into-the-program dept

Last week, we wrote about the ridiculous suggestion from the former Newspaper Association of America (now called the News Media Alliance) that President Donald Trump should scale back fair use because newspapers still don't like Google. As we noted, at a time when Trump has been strongly endorsing censoring newspapers, for those very newspapers to tell Trump to undermine a key cog in protecting free speech was absolutely ridiculous.

And, of course, now we can add the legacy recording industry to this same "shoot foot" brigade. Upon hearing about Trump's meeting with the heads of a bunch of top tech companies, the RIAA and a bunch of related recording industry associations (including ASCAP, BMI, A2IM, NMPA, SoundExchange and more... ) have sent a letter to Trump (found via Variety), asking him to force the internet companies to nerd harder to find better ways to censor the internet. This is fairly incredible, seeing as the traditional recording industry wasn't exactly a major Trump supporter. For them to now reach out to Trump and urge him to increase censorship of the internet is fairly astounding and sickening. Basically, to the RIAA and friends, hatred of Google and the internet is more important than concepts like free expression or holding our elected officials accountable.

Of course, the legacy recording industry doesn't come out and directly say "censor the internet," but that's exactly what they're asking for here (though watch the blog posts from defenders of the industry howl about me making this intent obvious):

Surely the world’s most sophisticated technology corporations can do better – by helping to prevent illegal access and paying fair market value for music with prices set by or based on the free market.

Strong protection for intellectual property rights will assure growth in both creativity and technology, benefiting the American economy as a whole.

We hope you will lead the effort to assure American creativity is encouraged, invested in, protected and fairly compensated in a manner that carries out the exclusive rights guaranteed in the Constitution to those who, with the genius of their mind, form the cultural identity of our great nation.

The call for censorship is in "preventing access" which means blocking what you can do online. The hilarious part is the "prices set based on the free market" because that's exactly what the industry is protesting. The whole "value gap" bullshit is basically the industry saying "we do not like what price the free market is setting, and therefore we need the government to artificially inflate prices through monopolies.

Just to be clear, if you're whining about not getting "fair compensation" you're clearly saying "I'm upset about the price the free market has set."

But the bigger issue here is the censorship piece. I shouldn't have to detail here how many times we've shown that copyright is abused for censorship purposes (including by governments). The call to hold platforms more accountable and putting the onus on them to "nerd harder" is a call to ramp up tools for censorship-via-copyright. This is pretty ridiculous -- and one hopes that musicians who have spoken out against Trump will also speak out against this demand to give him and his friends more power to censor parts of the internet.

Filed Under: copyright, donald trump, nerd harder, recording industry, value gap
Companies: a2im, ascap, bmi, google, nmpa, riaa, soundexchange

RIAA: How Dare The Internet Use The DMCA That We Wrote To Build Useful Services!

from the calm-down,-sparky dept

As we've mentioned, today is the day that comments are due to the Copyright Office on the effectiveness (or not) of Section 512 of the DMCA, better known as the "notice and takedown" safe harbor provisions. We'll be posting the details of our own filing at some point (possibly not until Monday as we're still finalizing a few things), but some of the other filings are starting to filter out, including a fairly astounding 97-page document from a bunch of legacy music industry organizations (about half of which is the actual filing, with the rest being appendices), including the RIAA, ASCAP, AFM, NMPA, SoundExchange and more. It's basically every organization that represents the way the industry used to work -- and the document reads like an angry polemic against the internet. It would have been much shorter, if they just wrote "our business used to be much better when we had more control and less competition -- and we never bothered to adapt, so fuck Google and all those internet companies -- and let's change the DMCA to punish them and magically bring back the good old days."

Also, the filing seems to leave out the fairly important point that it was these groups that basically wrote the DMCA that they're now whining about. Actually, let's get even more specific. The comment here was co-written by lawyer Steve Metalitz -- who has a way of showing up whenever some legacy industry is pushing to make copyright laws much, much worse. Metalitz's own bio emphasizes the fact that, as a lobbyist, he was "instrumental in the drafting" of the DMCA: So it seems rather... rich, for the legacy music industry to hire Metalitz, who proudly states that he was "instrumental in the drafting" of the DMCA while lobbying on behalf of these same groups, to now write a jeremiad about how totally awful the DMCA is for these same groups. But that's what's happened. The document literally mentions Google or YouTube more than once per page. But it starts right in with the industry's concerns, which might be summarized as "why hasn't Google stopped the evil piracy!?!?"

The Music Community’s list of frustrations with the DMCA is long. A broken “notice-and-takedown” system. Toothless repeat infringer policies. Active services mischaracterized as passive intermediaries. Incentives for services to embrace willful blindness instead of preventing known and widespread infringement. The words “representative list” read out of the statute.

Basically, Metalitz uses the document as a chance to list off how he's sad that the courts have basically ruled against copyright holders trying to chip away at the safe harbors at pretty much every turn:

Courts have also given little meaning to key provisions for content owners in the DMCA bargain. Examples include “red flag” knowledge, repeat infringer policies and representative lists. The result: safe harbor status for services that choose to stick their heads in the sand rather than do their fair share, forcing content owners to divert valuable resources from away creating content to sending minimally effective take down notices, or for content owners with limited resources, to actually refrain from sending takedown notices at all. Content owners, especially those with limited resources, simply cannot take on the entire digital universe alone.

At its worst, the DMCA safe harbors have become a business plan for profiting off of stolen content; at best, the system is a de facto government subsidy enriching some digital services at the expense of creators. This almost 20 year-old, 20th Century law should be updated.

Astoundingly, this comment claims that the results in the YouTube and Veoh lawsuits prove how broken the DMCA is and how much it favors internet companies. Remember, Veoh was a YouTube competitor that won its lawsuit that had been filed by Universal Music... but went out of business due to the legal costs of defending itself under the DMCA. And Metalitz and the RIAA are bitching about the fact that Veoh won... as if that was the travesty in the case, rather than the fact that the recording industry was able to shut down a perfectly legal web service that many people found useful.

The comment goes on to whine that even as more music is available to the public these days, revenue is down for some of those who signed on to the comment (the comment is careful not to mention that ASCAP, BMI, SESAC and SoundExchange revenue keeps going up... but... those inconvenient details must be ignored). What the filing also ignores, of course, is that these very same players fought tooth and nail against any of the innovative services that helped make this revolution in music accessibility possible. They basically now want to tax all the innovative companies who experimented and found the models that work and make consumers better off, while they themselves did none of that and actively sought to block nearly every new innovation. Talk about entitlement.

The comment also ignores the basic fact that if so much more music is being consumed today, that seems to suggest that the law must be working in some manner, seeing as the purpose of copyright law is to incentivize the creation of new works so that the public can benefit. By their own words, that seems to be happening.

Despite music being more popular than ever today, U.S. music industry revenues have been virtually flat since 2010 and are down nearly 50% since the DMCA was enacted in 1998. This has led to what we call the “value grab”, creating market distortions that lead to bizarre statistics like vinyl records generating more revenue for the industry in 2015 than the billions of on-demand ad-supported music streams on YouTube and similar services.

Except, of course, that comparison between vinyl and YouTube is total bullshit. As we were just discussing a week ago, the industry is comparing apples and oranges, using the gross "retail value" on vinyl (ignoring discounts and all the money that goes to everyone in the distribution chain) and only counting the net "wholesale value" on free streams (and ignoring the upsell opportunities or other revenue that comes from ad-supported streams).

The summary so far: we wrote the DMCA, but now we're going to whine about it. The public is benefiting like never before from new music -- so we're going to ignore that the purpose of copyright law appears to be met. We're not making as much money as we used to (ignoring that some of us are making much more than we used to)... but we see big internet companies making lots of money, so we're going to ignore that it's probably because they innovated and built services the public wanted while we sued our own biggest fans.

Compelling!

And, of course, the comment pushes for a "notice and staydown" regime:

Copyright owners should not be required to engage in the endless game of sending repeat takedown notices to protect their works, simply because another or the same infringement of the initially noticed work appears at a marginally different URL than the first time. The current standard of “URL by URL” takedown does not make sense in a world where there is an infinite supply of URLs. As described in the response to Question 15, technologies exist to identify content that is reposted on a digital service after it is removed, services of all sizes have implemented them, and they should be deployed as a standard industry practice.

Again, this ignores the basic fact that copyright is context dependent. And you can't put a total block on content, because you don't actually know if the content is actually infringing each time. Hell, remember in the Viacom case against YouTube (which the comment whines about), Viacom had to admit that the evil pirate uploaders to a bunch of the videos... were actually Viacom employees trying to market Viacom content. This is why we don't do full on content blocks, because just because the content is up, doesn't mean that it's infringing.

Even more ridiculous, while at one point noting that almost no one files counternotices, so that means that DMCA takedowns are almost all legit (despite a recent study debunking this point), it later whines that there are too many false counternotices:

In our experience, the counter-notification process results in too many false-positive counter-notices. For example, IFPI received counter-notices on 653 infringements, based on a sample of 98,753 infringements noticed to YouTube. After reviewing these counter-notices, it appeared that over 80% of the counter-notices had no good faith basis for claiming “mistake or misidentification,” the only valid statutory grounds for a counter-notification. Yet, based on this sample, the association representing the rights holders would be required to institute over 500 lawsuits in order to enforce their rights. This is an unmanageable burden. These statistics further demonstrate that the deck is unfairly stacked against rights holders.

Filing 500 lawsuits would be an "unmanageable burden?" Funny, the RIAA was able to go after at least 30,000 individuals. And, really, this paragraph acts as if filing a lawsuit is the only possible remedy in such a situation. It's not.

Also, trying to make sure that they're as evil and against the public and fans as much as possible, the comment actually decides to whine about the ruling in the dancing baby case, saying that it's some horrible burden to have to consider fair use before sending a takedown, even though they just need a subjective good faith belief, rather than an objective one:

We take this opportunity to highlight one case in particular, Lenz v. Universal Music Corp. In that case, contrary to Congressional intent and the weight of authority concerning who has the burden of claiming and proving fair use, the court held that a copyright holder must subjectively consider fair use before submitting a DMCA notice. This unique decision, and the fanfare that has followed it, is quite remarkable considering that other courts have expressly rejected that view, and that the Supreme Court has routinely held that the burden of proof for a fair use defense rests on the accused infringer.

They also whine that the newly amended version of that ruling took out the random dicta that an automated takedown system could meet the standard.

Believe it or not, that's just a sampling of all the ridiculousness in the comment. It's simply not a reality-based document. One hopes that the Copyright Office might actually recognize that, though that seems unlikely.

Filed Under: copyright, dmca, dmca 512, liability, notice and staydown, notice and takedown, safe harbors, steve metalitz
Companies: ascap, nmpa, riaa, soundexchange

Why Radio Stations Probably Couldn't Just Play David Bowie Music As A Tribute: Copyright Law Is Messed Up

from the just-the-latest-example dept

People are quite reasonably upset by the news of David Bowie's passing, with lots of reminiscing and certainly tons of listening to his music. I certainly re-listened to a bunch of his music on Sunday night after hearing about Bowie's death. And, some, such as comedian Eddie Izzard, suggested that "every radio station" should just play David Bowie music for the day as a tribute:

Please could every radio station around the globe just play David Bowie music today - I think the world owes him that.

— Eddie Izzard (@eddieizzard) January 11, 2016

It's certainly a nice idea... but as lawyer Cathy Gellis points out, at least in the US, it's likely against copyright law for many radio stations. The specific issue has to do with those radio stations that also stream online. As you may or may not know, there are a set of rules that you need to follow to be considered a "non-interactive" webcaster, and among those are the "performance complement" rules:

1. No more than 4 tracks by the same featured artist (or from a compilation album) may be transmitted to the same listener within a 3 hour period (and no more than 3 of those tracks may be transmitted consecutively).
2. No more than 3 tracks from the same album may be transmitted to the same listener within a 3 hour period (and no more than 2 of those tracks may be transmitted consecutively).

That's not just something that SoundExchange came up with on its own. It's written directly into US Copyright law (at the bottom of the page). At some point, years ago, Congress (or, more likely, a recording industry lobbyist), wrote up rules that said online radio couldn't play too many songs in a row by a single artists, because of the ridiculous fear that if they could, no one would buy music any more.

Now, the rules do say that the performance complement "may only be violated if the service has received specific waivers from the owner of the sound recording copyright" -- so it's possible that the copyright holder on Bowie's music could waive those rules, but it would have to be to a bunch of different radio stations, and it's unlikely they're going to do that.

So, once again, it seems that copyright law is getting in the way of what sounds like a perfectly lovely idea: creating a day-long tribute to David Bowie. No wonder he was so keen on having copyright go away entirely.

Filed Under: copyright, david bowie, eddie izzard, non-interactive stream, online radio, performance complement, radio, streaming radio
Companies: soundexchange

So How Much Of The $90 Million Pandora Is Paying RIAA Labels To Settle Lawsuit Will Go To Artists?

from the we're-waiting... dept

This isn't a huge surprise, but following Sirius XM settling the lawsuit filed against it by the RIAA labels over playing pre-1972 sound recordings, Pandora has now done the same, agreeing to pay $90 million to have the lawsuit go away. In both cases, the companies recognized that, while the law was unclear and some lawsuits had gone both ways, it was probably a lot easier in the long run to just pay up than face the uncertainty and the possibility of much larger fees. Of course, both companies do still face some individual lawsuits, such as the ones by Flo & Eddie (the company behind The Turtles) who kicked off this lawsuit craze.

But... there is still a big question. As with pretty much any of these lawsuits filed by the RIAA or MPAA and its members, when they come to a settlement, how much of that money actually gets passed along to the individual creators? In the past, the answer has been slim to none with vague answers about how the money would go into some general pool, and the answer may be similar here. Eriq Gardner at the Hollywood Reporter did the heavy lifting, and got the slightly vague answers from the labels:

For example, will the proceeds of the settlement be shared by the major labels with their recording artists? What share? Upon a request for comment, an RIAA spokesperson said it was a question best directed towards the labels themselves. We've reached out. According to a Sony insider, the label intends to share proceeds in the standard way, analogous to how money from SoundExchange is shared. The source acknowledges that the mechanism is still being worked out. Another source says that Universal intends to process money directly through SoundExchange, a digital royalty collection outfit. A Warner Music spokesperson says the "the artist share [is] being distributed through SoundExchange."

So, they're basically passing the buck to SoundExchange, which handles royalties for Pandora and other digital streaming services, and has an unfortunate history of not being able to find the artists it's supposed to be paying (though, it's been much better in the past few years). But, even so, it's not clear how SoundExchange will divvy up the money, and how much will just be going directly back to the labels themselves.

Filed Under: pre-1972, pre-1972 sound recordings, settlement
Companies: pandora, riaa, soundexchange

Funny How Recording Industry Only Likes A 'Free Market' When It's To Their Advantage

from the that-free-market-appears-slightly-tilted-in-one-direction dept

When it comes to the nexus between competition and regulation, competition is all too often cursed with fair-weather friends. For today's example, we'll take a trip down the copyright regulation rabbit hole.

It begins with a Copyright Royalty Board (CRB) proceeding for setting webcaster rates under a statutory license in Section 114 of the Copyright Act. The process, called "Web IV" because it is the fourth such proceeding under this section of the Copyright Act,^[1]was announced late last year and should conclude by the end of 2015. By mid-December, non-interactive webcasters like Pandora and iHeartMedia will know how much they must pay to stream (or "publicly perform") recorded music to listeners from 2016-2020.^[2]

These statutory license rates, part of a complex multi-tiered system that, as we've noted in the past, legally requires discrimination against new technologies, are set for 5-year periods and are paid to an entity called SoundExchange. SoundExchange is designated to collect royalties under the statutory license for certain uses of sound recordings, including Internet radio play of music.

(Perhaps you're thinking, "wait, I thought radio stations didn't pay royalties to play records on the air?" You would be right: traditional terrestrial radio does not pay royalties for playing sound recordings – which has historically been defended with the argument that radio play provides valuable promotion for sound recording owners. But in another example of copyright law discriminating against new entrants, while conventional terrestrial radio is not compelled to pay for the public performance of sound recordings, Internet radio must pay to do the same, under Section 106(6) of the Copyright Act.)

The rate Internet radio services pay is supposed to represent what a "willing buyer" would pay a "willing seller." During the round of rate setting that governed 2006-2010, however, the CRB announced a fairly punitive "willing buyer/willing seller" rate, which was so high that it exceeded some webcasters' total revenues. The risk that the Internet radio industry would collapse led Congress to enact the 2008 and 2009 Webcaster Settlement Acts, under which most non-interactive music licensees directly negotiated settlements with SoundExchange for that time period. An important wrinkle to this legislative action, however, was that Congress also directed that these settlements could not be used as benchmarks for future rates – which includes the current rate setting proceeding.

So, why is this relevant? It matters because in the current Web IV rate setting proceeding, SoundExchange has argued that recent deals struck in the free market by non-interactive webcasters should not be used as the benchmarks for non-interactive rates.

Those deals include an arrangement between Pandora and the collection of indie labels known as Merlin. The terms of that deal were lower than the existing statutory rate, and encouraged Merlin music to be played more (and thereby the music of major labels to be played less). At the time, rights-holders openly criticized Merlin for entering in the deal, noting that it could become a benchmark, and might result in prices coming down. It was a peculiar moment: despite all the cheerleading of moving toward a free market in music licensing of willing buyers and willing sellers, Merlin came under fire for actually being a willing seller at the best price it thought it could get.

SoundExchange previous said it was seeking "rates that reflect a fair market value for recorded music… based heavily on evidence of other deals that exist in the marketplace". Now, however, it argues that an analogous free-market deal with Merlin should be ignored, because it was in some way influenced and thereby tainted by settlements reached 6-7 years ago.^[3]

This situation illustrates an issue larger than webcaster rate setting: there is cognitive dissonance about what it means to have free-market transactions in lieu of statutory licenses. In parts of the music industry, there is hostility to the statutory licenses. While statutory (or "compulsory") licenses help overcome the enormous transaction costs of licensing millions of works from millions of rights-holders, they don't allow rightsholders to say "no" to all uses.^[4] These statutory licenses, it is sometimes argued, are unfaithful to the notion of copyrights being property rights. Such transactions would be better handled in the free market, the argument goes, and so statutory licenses should be repealed.

Nevertheless, the free market enthusiasm disappears when a free-market deal was actually reached outside the statutory license. To the dismay of other licensors, Merlin's competitive price was *lower* than the statutory rate, and suddenly the free market doesn't look so hot. Hence, Merlin was criticized and now efforts are being made to expunge Merlin's deal from the record.

There are numerous transactions cost-related reasons why — absent better copyright ownership records — it is impossible to have a completely free market in music licensing at present. Still, insofar as anyone is going to champion competition as an alternative to statutory licenses, that means accepting prices that may be below statutory rates. If "free market" means rates can only be higher than statutory rates, then we don't have a free market; we have a price floor. Or, stated otherwise: we're not really talking about "willing buyers and willing sellers" if we're only going to entertain market-based deals that come in above the statutory rate.

^[1] Officially, "In re Determination of Royalty Rates and Terms for Ephemeral Recording and Digital Performance of Sound Recordings."

^[2] The CRB only sets rates for "non-interactive digital music services"; interactive services like Spotify, which are "interactive" because users can determine themselves which music is delivered, fall outside the statutory license.

^[3] The rationale for this is that Congress directed in Section 114(f)(5)(C) that Webcaster Settlement Act (WSA) agreements shall not "be admissible as evidence or otherwise taken into account" in a rate settlement proceeding. Because SoundExchange contends the Merlin agreement resembles the 2008-09 settlements, considering the Merlin rate would be "taking into account" a WSA agreement.Instead, SoundExchange contends that the benchmarks for non-interactive rates should be deals between interactive services like Spotify. When all the relevant apples are inadmissible, we're left referring to oranges.

^[4] In econ-speak, we would say that statutory or compulsory licenses resemble a liability rule more than a property rule.

Reposted from the Disruptive Competition Project

Filed Under: copyright, copyright royalty board, crb, free market, music industry, non-interactive, streaming rates, webcast rates, webcasters
Companies: iheartmedia, pandora, soundexchange

No, Getting Your Music Played On The Radio Is Nothing Like Slavery

from the want-to-try-that-again? dept

Every couple of years, like clockwork, the RIAA gets its friends in Congress to introduce some form of a performance rights bill, that would require radio stations to pay compulsory licenses to performers of the music they play on the radio. Every year it goes nowhere because the radio owners' big lobbying group, the NAB, is about equal in power to the RIAA. So the two sides fight it out, donate a lot of money to Congress, and nothing changes. There's generally a lot of FUD thrown up in the process, along with some crap about "fairness" when that's not what they're really pushing for at all. It's all about more revenue for the record labels and that's it. If you're unaware, playing music on the radio already requires payments to songwriters/publishers, but not to performers. The reason being that being on the radio acts as promotion, allowing the musicians to make it up elsewhere. We know that this happens because of the widespread practice of payola, in which the labels pay the radio stations to play their music. If it wasn't worth it to get on the radio, the labels wouldn't regularly get involved in payola scandals. And yet, they do, because radio play (even today) remains great advertising for music.

We thought things had reached a new low four years ago when Rep. John Conyers sponsored one of these bills and insisted that radio stations playing musicians' music was the equivalent of slavery. Apparently, the RIAA liked that line so much it fed it to a different Congressional Rep. this year. RIAA darlings Jerry Nadler, Marsha Blackburn and Ted Deutch have joined Conyers in releasing the latest version of a performance rights act, this time called the "Fair Play, Fair Pay Act of 2015" and the RIAA's spin doctors somehow decided that having Rep. Nadler use the slavery line was a good idea:

Previously, radio complained about the economy, asserting that they simply couldn’t afford to pay performers. But as far as the radio industry is concerned, “it's never the right time,” Nadler said. “What other industry says, ' We can’t afford to pay our workers; We want them to work for free,'” he cracked. “We got rid of that argument here in the U.S. in 1865," referencing the abolition of slavery legislated by the 13th Amendment.

I'm sorry, but in no possible way is promoting someone's music on the radio the equivalent of slavery. To say so is not just insulting and offensive, but it's ridiculous. You can argue about the appropriateness of royalties, compulsory rates or anything else -- but to argue that getting played on the radio without direct compensation (despite all the indirect compensation) to slavery is just flat out ridiculous. Nadler doesn't get paid each time he goes on TV to talk about whatever bill he's supporting, does he? Is that slavery? No, it's promotional, just like music being played on the radio.

Just the fact that Nadler has to resort to this silly and tired argument again, despite it flopping five years ago, should tell you all you need to know about this weak attempt by the RIAA to squeeze out more money without doing anything different.

Filed Under: congress, fair play fair pay act, jerry nadler, john conyers, marsha blackburn, performance rights, performance rights act, radio play, slavery, ted deutch
Companies: musicfirst, riaa, soundexchange

RESPECT Act Should Be HYPOCRISY Act After How Often Labels Screwed Over Artists

from the respect? dept

Yesterday, the music labels, under the guise of RIAA spinoff SoundExchange, along with Congressional Reps. George Holding and John Conyers, announced some new legislation and a coordinated PR campaign for what they're calling "Project72." The official name of the bill is the "Respecting Senior Performers as Essential Cultural Treasures Act" or the RESPECT Act. There is so much hypocrisy and ridiculousness here that it's difficult to know where to start. However, in short, the labels fought hard to keep the situation the way it is today, and a very large number of the musicians the RIAA rolled out in "support" of this new law -- claiming they just want to get paid by music streaming services -- are musicians who got totally screwed over by RIAA labels in the past. How about a little "respect"?

As we've been reporting, there's been an ongoing legal fight over how to handle pre-1972 sound recordings, because they are technically not covered under federal copyright law. This is because, back in 1909, Congress explicitly excluded sound recordings from the Copyright Act, noting that they didn't believe the Constitution allowed copyright to cover sound recordings (think about that for a second...). A variety of state copyright laws (or the equivalent) popped up to try to fill in the gap. With the 1976 Copyright Act, however, sound records made in 1972 and after were covered, leaving all recordings from pre-1972 in a bit of legal limbo. The copyright office has been debating what to do about this for years. So far, it's actually created something of a cultural disaster, because works that should be in the public domain won't be in the public domain for the rest of our lifetimes.

Meanwhile, many have suggested that a perfectly legitimate way of dealing with this would be to just retroactively say that all pre-1972 sound recordings should be brought under federal copyright law. However, the RIAA itself has fought very hard against this. Why? There are a few reasons, but here are a few big ones: (1) Since the copyright lasts so much longer under state laws, they get to keep the copyright longer. (2) They love to use this issue to claim the DMCA's safe harbors don't apply to any user-generated content site that includes pre-1972 sound recordings. It's a backdoor into gutting the DMCA's safe harbors. (3) Unlike federal copyright law, post-1978, there are no termination rights, allowing the original creator to take back their copyrights.

So it seemed particularly hypocritical last month to see SoundExchange suddenly go all crazy around the claim that music streaming sites don't pay royalties on pre-1972 works. Of course, this is, in part, because of the RIAA's own efforts to keep pre-1972 works from being put under federal copyright law. The various state laws don't include a public performance right, and thus there are no necessary licenses for the streaming of such works -- and that's been widely accepted as the law for years. Until now. If the RIAA wanted to change that, it should have helped move those works under federal copyright law, but it has fought hard against it.

Instead, we get "The RESPECT Act" which would effectively only extend performance rights to pre-1972 sound recordings, while leaving everything else about those works uncovered by federal copyright law. In other words, the RIAA (via SoundExchange) wants to only put the parts of copyright law it likes on pre-1972 sound recordings, while keeping the rest understate laws. And they claim this is about RESPECT?

But here's where it gets really, really ridiculous. To "support" this new legislation from Holding and Conyers, which they're calling "The RESPECT Act," and which they claim is all about getting musicians paid... they trotted out a bunch of famous musicians who support this law.

Project72 kicks off with an open letter, signed by more than 70 recording artists, calling on digital radio to treat all sound recordings equally and to "pay for all the music they play." Artists and bands urging these services to "do right by legacy artists" include: The Allman Brothers Band, The Beach Boys, Roseanne Cash, Melissa Etheridge, Al Green, B.B. King, The Moody Blues, Cyndi Lauper, Martha Reeves, members of Steely Dan, The Supremes, The Temptations, Three Dog Night, and many more.

Note that they say "pay for all the music they play." They do not say to "pay the artists for all the music they play." And that's because SoundExchange and the record labels have a rather long history of not actually paying the artists. Respect!

Hell, you'd think that the RIAA/SoundExchange would have the common sense to check to see whether or not any of the big name stars they brought out had a history of being screwed over and simply not paid by their RIAA labels before attaching them to this campaign. But it appears they did not. Looking through the list of artists who are part of the campaign (beyond just the headliners listed above), we see... quite a few disputes involving the RIAA not paying those artists. All of the following artists signed onto this campaign, despite the fact that RIAA-associated labels have a long history of screwing them over.

• The Allman Brothers have had to sue both Universal Music and Sony Music for unpaid iTunes royalties.
• The Temptations sued Universal for not paying iTunes royalties properly.
• The Beatles sued EMI over unpaid royalties.
• Martha Reeves sued Motown for unpaid royalties
• The widow of "Dave" in the famous Sam & Dave duo had to sue Atlantic Records for unpaid royalties in 2001.
• Gene Chandler's label Vee-Jay, on which he recorded "Duke of Earl," was infamous for not paying royalties and actually went bankrupt when threatened with lawsuits for unpaid royalties.
• Mark Farner, of Grand Funk Railroad, was paid $350 a week for the first two years as an "employee" and, after a dispute with the band's "manager," had to give up all the rights to the music anyway (meaning he wouldn't get paid for those songs anyway).
• Roger McGuinn, from the Byrds, has told Congress before that he never received royalties (beyond a "modest advance") for the 15 albums he recorded with the band, suggesting that the Byrds are still considered "unrecouped" and any money that might get paid out would just go to his label rather than him anyway.
• An early member of Steely Dan has been suing claiming that he hasn't received any SoundExchange royalties he's owed.
• Yoko Ono sued EMI over unpaid John Lennon royalties.

And that's just a sampling from the list (didn't have time to go through everyone, so just picked more recognizable names). While yes, they're now arguing for "royalties" from Pandora and from Sirius XM, they might want to look more closely at who they've partnered with to seek those royalties. After all, if the RIAA hadn't blocked efforts to federalize those pre-1972 recordings, this wouldn't even be an issue. And, more to the point, since the labels own the copyrights on most of these songs anyway, the royalties are going to go into their coffers, and as the list above shows, the RIAA labels seem to have nearly perfected the process of not paying artists.

If Reps. Holding and Conyers really wanted to "respect" such artists, perhaps it would focus on encouraging them to actually avoid the record labels who have worked so hard to not pay them in the past.

Filed Under: allman brothers, beatles, copyright, gene chandler, george holding, grand funk railroad, john conyers, mark farner, martha reeves, pre-1972, pre-1972 sound recordings, respect act, roger mcguinn, royalties, sam & dave, steely dan, streaming, the byrds
Companies: emi, riaa, sony music, soundexchange, universal music

RIAA Claims That It Is 'Standing Up For' Older Musicians That It Actually Left To Rot

from the wtf? dept

The RIAA is not exactly known for its positive treatment of musicians. If you're at all familiar with the art of RIAA accounting, you'd know about how they structure deals to totally screw over musicians, doing everything possible to make sure they never get paid a dime. Yes, many are given advances, but those advances are "loans" on terrible terms in which the labels add on every possible expense that needs to be "paid back" before you ever see another dime. Very few musicians ever "recoup" -- even after the labels have made back many times what they actually gave the artists. For the most succinct example of how the labels make out like bandits, profiting mightily while still telling artists they haven't recouped, here's Tim Quirk, who a few years back explained how it worked with his band, Too Much Joy (TMJ):

A word here about that unrecouped balance, for those uninitiated in the complex mechanics of major label accounting. While our royalty statement shows Too Much Joy in the red with Warner Bros. (now by only $395,214.71 after that $62.47 digital windfall), this doesn't mean Warner "lost" nearly $400,000 on the band. That's how much they spent on us, and we don't see any royalty checks until it's paid back, but it doesn't get paid back out of the full price of every album sold. It gets paid back out of the band's share of every album sold, which is roughly 10% of the retail price. So, using round numbers to make the math as easy as possible to understand, let's say Warner Bros. spent something like $450,000 total on TMJ. If Warner sold 15,000 copies of each of the three TMJ records they released at a wholesale price of $10 each, they would have earned back the $450,000. But if those records were retailing for $15, TMJ would have only paid back $67,500, and our statement would show an unrecouped balance of $382,500.

In other words, musicians don't get paid anything in most cases, while the labels can earn a tidy profit for years and years, still insisting the band hasn't recouped. It's why a band can sell a million albums and still owe $500,000.

I bring this up, because of the latest ridiculousness from the RIAA, claiming that it "stands behind" artists who aren't making enough money. We've already written about the latest lawsuit against Pandora, in which the RIAA/Soundexchange are saying that Pandora isn't paying pre-1972 artists (despite the fact that the RIAA itself refuses any attempt to put those recordings under federal copyright law, which would mandate compulsory licenses). We've also covered the ridiculousness of the RIAA releasing bizarre statements from artists like Steve Cropper, pretending that programmers still get paid for code they wrote in 1962.

But now it's reached truly ridiculous levels. musicFirst, a lobbying group put together by SoundExchange and the RIAA (potentially violating some laws), has put out an astoundingly ridiculous blog post, in which it discusses these lawsuits over pre-1972 sound recordings, by arguing that it is standing up for pre-1972 artists and not letting them "fade away" (a weak reference to a Buddy Holly song).

What a shady move. Fans will go to record stores to pay for this timeless music, but billion dollar corporations won’t pay a dime. And these services sell those same fans stations like the “60s on 6” and the “Buddy Holly station” yet refuse to give one dime of subscribers’ payments to the artists that made the music on those stations.

No matter what the outcome is in courts of law, Sirius XM and Pandora will pay a hefty price in the court of public opinion and in Congress. We love and respect our pre-72 artists and we will stand up for them. We will not let them fade away.

Oh really? You won't let those artists fade away? Then I assume you'll be going back and paying all of those artists you screwed over for decades, right? Let's start with Lester Chambers, for example, who got some attention a couple years ago, for how the RIAA totally fucked him over and let him fade away: Of course, it wasn't the RIAA, SoundExchange or musicFirst who helped him out. It was the internet, led by Reddit founder Alexis Ohanian, who helped Chambers raise over $60,000 on Kickstarter for a fantastic new album (it really is great, if you haven't yet heard it) -- and that money went to Chambers, not to a label who then refused to pay royalties. Or how about all of those artists who are seeking to take back their copyrights thanks to the copyright termination clause, which the RIAA is fighting tooth and nail against -- the same copyright termination clause that the RIAA's number two guy tried to secretly delete from copyright for musicians, while he was a Congressional staffer (months before taking his $500,000 salary at the RIAA, where he's remained until today).

So, whether or not Pandora and Sirius XM are right or wrong in how they handle the streaming royalties on pre-1972 works, the idea that the RIAA is somehow out there "protecting" older artists and not letting them fade away is a sick joke.

Filed Under: artists, lester chambers, musicians, royalties, support
Companies: musicfirst, pandora, riaa, sirius, soundexchange

Can Anyone Name A Programmer Still Getting Paid For Code He Wrote In 1962?

from the we'll-wait dept

So, we already wrote about the RIAA's big new legal attack on Pandora over royalties on pre-1972 sound recordings. The legal issues there are complex and convoluted, involving a mix of state common law along with federal copyright law. However, the RIAA has clearly decided that it's not going to delve into the nuances there, preferring to go with totally bogus spin. This started with an opinion piece by SoundExchange's CEO, in which he claimed that it was unfair that artists from pre-1972 works weren't getting paid. And with the launch of this lawsuit, the RIAA is trotting out some artists who are making similarly bogus statements:

The RIAA circulated the lawsuit on Thursday along with quotes from artists or their heirs. "It’s an injustice that boggles the mind," says Booker T. & the MG's Steve Cropper. "Just like the programmers who deserve to be paid for their work, I deserve to be paid for mine.”

This depresses me, in part, because I'm a huge Steve Cropper fan -- and have spent tons of money purchasing a variety of music from Booker T. & the MG's over the years (and plenty of other of Cropper's work both at Stax and elsewhere). However, this is a really unfortunate and misleading argument. It's obviously an attempt to hit at those terrible "techies" at Pandora, implying that Pandora's engineering staff continually gets paid for their work.

But it actually underlines how silly the RIAA's argument is here. Because no Pandora programmer expects to get paid for his work 50 years from now. They get paid today to work today. And that's it. If that person leaves Pandora tomorrow, then they don't keep getting paid for it. Nor do they expect their children and grandchildren to keep getting paid for it. Booker T. and the MG's biggest hit, Green Onions, came out in 1962. It would be great if Cropper could point to a programmer who is still getting paid for code he wrote in 1962. Because I would imagine it's not a very big list.

This is also why many of the other quotes the RIAA is pushing concerning this effort are so misleading as well. Buddy Holly's wife, Maria Elena Holly, rightly notes that "Many artists from the 1950s are retired and struggling to support themselves or have families or heirs who are trying to make ends meet." That is, no doubt, true. But that's a different issue. Copyright was never meant to be a welfare system for artists. It was never meant to keep paying them in retirement. It was meant to be an incentive to create, and once it worked, that was it. In fact, under the copyright laws that were in place in 1958 when Buddy Holly released his hit "Everyday," the absolute longest that the copyright on that song could have lasted was 56 years. In other words, when Holly released that song, he knew that by 2014 (hmmm...) that song would be in the public domain. So it seems, well, a bit unseemly to suddenly be whining about it now.

In fact, I'm sure that many programmers from the 1950s are similarly "retired and struggling to support themselves or have families or heirs who are trying to make ends meet." And many of those retired programmers created the underlying structure and systems for today's computers and internet, which has created so much value for the world. But we don't see them and their heirs whining about how the world owes them a living for work they did more than half a century ago.

And this is the problem. There are almost no professions in the world in which you get to do some work (even if it's amazing work) half a century ago, and then still have people paying you for it today. To act like this is some sort of massive offense just seems silly and misguided.

Filed Under: copyright, licensing, pre-1972, royalties, steve cropper
Companies: pandora, riaa, soundexchange

Recording Industry Wants To Have It Both Ways When It Comes To Pre-1972 Recordings

from the are-they-the-same-or-different? dept

Yet another story of hypocrisy by the recording industry? Why yes, indeed. For years now, we've been covering the issue of pre-1972 sound recordings. When Congress wrote the 1909 Copyright Act, it did not cover sound recordings, because Congress didn't think that sound recordings qualified for copyright. In a statement released by Congress with the Act, it said it deliberately chose not to cover sound recordings, believing that they weren't covered by the Constitutional limitation on "writings" for copyright protection:

Indeed, the report released with the Copyright Act expressly stated that Congress did not intend to protect sound recordings: "It is not the intention of the committee to extend the right of copyright to the mechanical reproductions themselves, but only to give the composer or copyright proprietor the control, in accordance with the provisions of the bill, of the manufacture and use of such devices." According to one commentator, Congress had two principal concerns about sound recordings, leading it to decline to protect them. First, Congress wondered about the constitutional validity of such protection. The Constitution allows Congress to protect "writings," and Congress was uncertain as to whether a sound recording could constitute a writing. Second, Congress worried that allowing producers to exclusively control both the musical notation and the sound recording could lead to the creation of a music monopoly.

That latter concern certainly was prescient. When Congress did a massive overhaul of copyright law in 1976, the recording industry was a much more powerful lobby, and so sound recordings were included. However, in the years between 1909 and 1976, many states had created their own (often bizarre) "state" copyrights to protect recordings. Rather than deal with this in an intelligent way, Congress basically said the new federal copyright rules would only apply to songs recorded in 1972 or after, and pre-1972 recordings would remain in a bizarre limbo. This has created a whole host of legal issues, and the Copyright Office has been trying to figure out what to do about this for years.

However, it appears that the recording industry would like it both ways. When it's to their advantage, they claim that pre-1972 recordings should be treated just like modern song recordings. And when it's not to their advantage, they insist that pre-1972 recordings should be treated wholly differently. In various hearings about the issue, the RIAA has been one of the most vocal in arguing against treating pre-1972 recordings as if they're covered by federal copyright law. And, at the same time, they've argued in court repeatedly that the DMCA safe harbors don't apply to pre-1972 recordings, making various music storage lockers liable for any such recordings they host. Some courts have rejected this theory, while others have accepted it. Either way, the recording industry has been pretty adamant that pre-1972 recordings should be treated differently, so they can sue whomever they want.

And yet... when various streaming music companies recognize this fact, and note that pre-1972 recordings aren't covered under statutory licensing regimes... the recording industry freaks out. Michael Huppe, the President of SoundExchange -- an organization created by the RIAA -- is writing in Billboard magazine about how unfair it is that streaming services like Sirius XM and Pandora don't pay statutory rates for pre-1972 recordings. Huppe complains that "this is not fair" and notes:

It's a matter of simple fairness to offer equal treatment for all sound recordings.

Okay. If that's true, then why aren't SoundExchange and the RIAA out there in support of federalizing the copyright in pre-1972 recordings? Why aren't SoundExchange and the RIAA agreeing to the fact that the DMCA's safe harbors apply equally to pre-1972 recordings? I'm all for "equal treatment for all sound recordings" as well, but someone ought to point out to SoundExchange and the RIAA: you first.

Filed Under: copyright, pre-1972, royalties, sound recordings
Companies: pandora, riaa, sirius xm, soundexchange