Court Says ASCAP Can't Selectively Remove Songs From The Blanket License It Gives Pandora

from the some-sense dept

The legacy recording industry's ridiculous war on Pandora has reached some really ridiculous levels, especially as ASCAP has continually tried to pretend that Pandora was trying to stiff artists. The details suggested something entirely different. After staying quiet for a while, Pandora finally highlighted the true story, which showed that the claims about Pandora were completely bogus. It was actually ASCAP who was playing sick games with Pandora, trying to remove the right to play certain songs, without even letting Pandora know which songs.

Historically, Pandora has paid essentially the same rate as all other forms of radio, a rate established unilaterally by the performing rights organizations, ASCAP and BMI, in the late 1990s. In November of last year, following a lengthy negotiation, Pandora agreed with ASCAP to a new rate, an increase over the prior amount, and shook hands with ASCAP management. Not only was our hand-shake agreement rejected by the ASCAP board, but shortly thereafter we were subjected to a steady stream of “withdrawals” by major publishers from ASCAP and BMI seeking to negotiate separate and higher rates with Pandora, and only Pandora. This move caused us to seek the protection of the rate, also recently negotiated, enjoyed by the online radio streams of broadcast radio companies. It’s important to note that these streams represent 96% of the Internet radio listening hours among the top 20 services outside of Pandora (talk about an un-level playing field). We did not enter this period looking for a lower rate – we agreed to a higher rate. But in a sad irony, the actions of a few small, but powerful publishers seeking to gain advantage for themselves has caused all songwriters’ royalties to go down. Any characterization of Pandora as being out to cut publishing rates flies in the face of the facts.

And while not highlighted there, Pandora also noted that ASCAP refused to let Pandora know which tracks were being withdrawn, leading to uncertainty over potential liability if it played the wrong track:

During negotiations, ASCAP and the publisher increased the pressure by refusing to provide Pandora the list of tracks that were being withdrawn, exposing Pandora to copyright infringement liability of up to $150,000 per work. At Pandora’s scale, such liability would be enormous.

As we noted at the time, this appeared to be in direct violation of a long-term antitrust agreement ASCAP has with the DOJ, given ASCAP's massive market power. Some in our comments suggested it was crazy to suggest this move violated the antitrust agreement, but a court has basically ruled strongly in favor of Pandora, noting that it goes against the agreement to selectively remove songs from the blanket license, and allowing Pandora to continue to stream such songs. Basically, the court rules that the consent decree from the antitrust fight means that ASCAP can't divide up the various copyrights to separate out things like "new media rights," but rather if it has a song in its catalog, it must license it under its blanket license.

ASCAP’s argument is predicated on the Copyright doctrine of “divisibility of rights” within a copyrighted work. It is true that “[t]he Copyright Act confers upon the owner of a copyright a bundle of discrete exclusive rights, each of which may be transferred or retained separately by the copyright owner.” But while the Copyright Act allows rights within works to be alienated separately in general, [the consent decree] imposes restrictions beyond those imposed by the Copyright Act on ASCAP. [The consent decree denies] ASCAP the power to refuse to grant public performance rights to songs to particular users while, at the same time, retaining the songs in question in its repertory.

I await ASCAP's next press release insisting that Pandora is the one playing games....

Filed Under: antitrust, blanket license, streaming
Companies: ascap, pandora

BMI Appeals Ruling That Lets Venues Route Around BMI, Claiming It Somehow Harms Musicians

from the uh,-what-now? dept

At the end of July, we wrote about a court ruling that DMX, a commercial provider of music (a la muzak) to restaurants, bars and the like, had won a lawsuit, which would allow it to deduct money from the blanket license it had to pay collection society BMI if it did licensing deals directly with BMI artists. Not surprisingly, BMI is none too happy about this ruling and it has appealed it. What I find fascinating, of course, is how BMI tries to spin this:

"On behalf of our songwriters, composers and music publishers, we will not allow this ruling to stand without an appeal," said Del Bryant, BMI President & CEO. "Our writers and publishers should not be expected to lose more than half of their income from DMX based on the court’s erroneous holdings, which substantially reduce the value of their creative efforts."

But that makes no sense. If the writers and publishers made significantly less with DMX, why would they enter into a separate agreement with DMX? The "problem" would solve itself because no BMI covered artists would sign a direct deal with DMX.

Filed Under: blanket license, collection societies
Companies: bmi, dmx

New Zealand Authors Demanding Compulsory Blanket 'You Must Be A Criminal' Internet Charge

from the author-welfare dept

With New Zealand's copyright reform proposal still being discussed, we're hearing about some really ridiculous proposals to make it even worse. We already noted the idea of a full internet ban for users found to be infringing, and Glyn Moody Michael Scott points us to a proposal from "The Society of Authors" in New Zealand saying that there should be a blanket licensing fee for anyone accessing content online. Yes, basically they're asking for free money, backed by a government proposal. Rather than having to actually work to put together a business model, they want the government to just tell ISPs to collect a fee from everyone and then they'll figure out a way to give it to some authors.

Filed Under: authors, blanket license, copyright, new zealand

Court Lets Venues Deduct Fees From BMI License For Directly Licensed Music

from the this-might-be-a-bigger-problem-than-creative-commons dept

While ASCAP is busy attacking Creative Commons and refusing to debate, it appears that the performance rights organization may have a bigger problem on its hands. Reader Beefcake alerts us to an important ruling against BMI, the other big US performance rights group (there's also the somewhat smaller SESAC). The case itself involves a commercial music company, DMX (who provides music to various venues such as stores, restaurants and bars), that had been licensing some music directly from publishers and writers. But, as plenty of venues have learned, the big Performing Rights Organizations tend not to care whether or not you've directly licensed works (or just used public domain or non-covered works). They still demand a blanket license. This ruling, however, says that if you "directly license" works, you can get an adjustable fee blanket license, which would let venues decrease the amount they pay BMI (and, one would assume, ASCAP and SESAC), by deducting a portion for the directly licensed music: Now, it's important to point out that this seems to cover specifically deductions for when DMX directly licenses BMI music. The way DMX's fees are set up, it appears to pool all the royalties it needs to pay into a certain bucket, and then splits it up by percentage of music played. So, theoretically, playing lots of freely licensed music could also decrease the rate paid to BMI.

The key here, however, is that this not only gives venues more incentive to directly license music in some cases (many won't, of course, because it's too big of a hassle), it also may force more transparency on BMI and the others. One major complaint we constantly hear about ASCAP and BMI is the lack of transparency in how they act in terms of counting performances and determining payouts. But, as the analysis of this ruling notes, DMX appears to be the opposite:

DMX's accounting to publishers and writers for direct licensed works features quarterly accounting 45 days after the end of each quarter, as opposed to the typical performing rights organization schedule of 9 or more months after a performance. DMX also provides direct counts of the number of plays of each work.

So, for artists upset about the way BMI or ASCAP treats them, it can now make more sense to just deal directly with DMX, which will pay them faster, give them more accurate and up-to-data data, and potentially pay out higher rates. It creates a bit of a competitive element that BMI and ASCAP could really use.

Filed Under: blanket license, collection societies
Companies: bmi, dmx