EU Says That, No, Rental Car Companies Don't Need To Pay A License To Rent Cars With Radios That Might Play Music

from the copyright-insanity dept

Performance Rights Organizations (PROs), sometimes known as "Collection Societies," have a long history of demanding licensing for just about every damn thing. That's why there was just some confusion about whether or not those with musical talents would even be allowed to perform from their balconies while in COVID-19 lockdown. And if you thought that it was crazy that anyone would even worry about things like that, it's because you haven't spent years following the crazy demands made by PROs, including demanding a license for a woman in a grocery store singing while stocking the shelves, a public performance license for having the radio on in a horse stable (for the horses), or claiming that your ringtone needs a separate "public performance" license, or saying that hotels that have radios in their rooms should pay a public performance license.

Five years ago, we wrote about another such crazy demand -- a PRO in Sweden demanding that rental car companies pay a performance license because their cars had radios, and since "the public" could rent their cards and listen to the radio, that constituted "a communication to the public" that required a separate license. The case has bounced around the courts, and finally up to the Court of Justice for the EU which has now, finally, ruled that merely renting cars does not constitute "communication to the public."

From the CJEU's press release:

... the Court of Justice, in its judgment delivered today, held that it is the case of the supply of a radio receiver forming an integral part of a hired motor vehicle, which makes it possible to receive, without any additional intervention by the leasing company, the terrestrial radio broadcasts available in the area in which the vehicle is located. That therefore differs from acts of communication by which service providers intentionally broadcast protected works to their clientele, by distributing a signal by means of receivers that they have installed in their establishment.

Basically, people aren't renting cars for the purpose of listening to music, and it's not like the rental car company is creating some special musical offering. They're just renting cars. Which have radios. Which might play music. If a customer turns it on and tunes into a radio station. And thus, finally, years later, we are assured that renting cars is not "communicating [music] to the public" for which the rental car company must pay extra.

But just the fact that this spent half a decade in court should give you an idea of just how greedy and messed up the copyright world is, with the various PROs/Collection Societies leading the way down the most ridiculous path.

Filed Under: cjeu, collection societies, communication to the public, copyright, eu, performance rights, pros, public performance, radios, rental cars

Kenyan Government Axes Corrupt Copyright Collection Group, Replaces It With New Collection Group That Will Surely Be Less Corrupt

from the if-at-first-you-don't-succeed dept

While copyright collection societies the world over tend to be good hosts for the disease of corruption, not all corruption is equal. These collection groups often like to jack up fees when someone points out that they actually have to do their job, to threaten businesses in the most insane ways, and also to, oops, sometimes just totally forget to pay the artists they purport to benefit. Over in Kenya, however, the dominant copyright collection group, MCSK, went for and hit the corruption trifecta by engaging in all of three at the same time. Not a good look for anyone who thinks these collection groups have a role to play for artists.

It got so bad, in fact, that the Kenyan government has decided to pull MCSK's license to operate.

The Music Copyright Society of Kenya has lost the licence to collect music royalties. MCSK's boss Maurice Okoth was suspended in March last year over corruption claims though he was later acquitted.

The copyright board revoked MCSK's license in February after its officials failed to submit their audited financial statements and amounts paid in royalties to their members. Edward Sigei, Kenya Copyright Board executive director, said at the time that MCSK had failed to submit the financial statement despite having been given a grace period of three months to do so.

Yes, even after being acquitted of corruption charges, MCSK still couldn't even feign trying to be above board with the government by producing documentation detailing how much its artist-helping organization managed to help any artists. For a group with the singular mission of collecting money in order to pay artists royalties, it's unclear to me how a failure to be able to produce its books on that mission is not deserving of the business death penalty. I also can't imagine how anyone who had to suffer through MCSK's corrupt practices could be anything but entirely soured on the concept of collection societies generally.

The Kenyan government, it seems, has a better imagination than I do. It has elected to replace MCSK with another collection society.

This follows the decision by the board of directors of Kenya Copyright Board on Monday to approve the licensing of a new body, Music Publishers Association of Kenya Limited, to collect royalties on behalf of authors, composers and publishers from March 2017 to February 2018, effective immediately.

"The decision was made after the new association satisfied the requirements of Section 46 of the Copyright Act, 2001, and Regulation 15 and 16 of the Copyright Regulations 2004," read a statement from Kecobo sent to newsrooms.

Look, to be fair, it's likely that Kenya's Copyright Board doesn't have the authority to simply state that no collection societies will be granted a license to operate, but someone in the government does. And, even if it is unwilling to go that far, I would think the government would at least want to hear from artists who had the pleasure of not being paid properly by the previously-licensed collection group. At what point do Kenyan artists, if not the Kenyan government, decide there is a better way to conduct business than making deals with the muck?

Filed Under: collection societies, copyright, cso, kenya, pros
Companies: mcsk, music copyright society kenya, music publishers association

Macedonia Copyright Collection Group Forces All Macedonian Music Off Of All Macedonian Broadcasts

from the that'll-teach-'em dept

This is a strange one, for sure. Often times when we discuss disputes from copyright licensing or collection groups, which will universally complain that they are not collecting enough money when given any opportunity, some will comment that the artists should just pull their music from all broadcasts if they're not happy with the arrangement. This kind of nuclear option is rarely, if ever, invoked for a whole host of reasons that include compulsory licensing arrangements and rules, the sincerity of the complaints from the licensing groups, and the simple business interests behind the benefits of having music heard on the radio.

But in Macedonia, one such licensing group has quite literally taken its musical ball and stomped home. This whole spat has been initiated by ZAMP, previously the sole music copyright collection organization in all of Macedonia, all because a second collection group has been started in the country, alongside more strict rules governing how much money ZAMP can collect for the artists it represents. As a result, ZAMP has informed Macedonia's broadcasters that they are henceforth banned from playing any music created by Macedonian artists, whom ZAMP claims to represent.

The ban came after the culture ministry gave a licence to the newly-formed SOKOM MAP association to collect songwriters’ and performers’ fees from TV and radio broadcasters.

“Their goal is to divide the authors and to put a hand on the money collected by ZAMP. Thus the new association, SOKOM MAP, has become an instrument in the culture ministry’s hands,” ZAMP said in a statement.

SOKOM MAP, the new collection group, has insisted that it is not in fact an arm of the Macedonian government, but another collection group representing artists. Based on a frustrating Google translation of SOKOM MAP's website, it appears to have nothing to do with the government at all, instead being a non-profit group representing songwriters.

Complicating all of this is a law in Macedonia that requires broadcasters to include 40% Macedonian-made music within their music broadcasts. Thus, broadcasters are currently screwed either way: they risk fines from ZAMP if they play Macedonian music, or risk fines from the government if they don't. To give you an idea of just who the broadcasters are afraid of most in this equation, they've pretty much universally bent to the demands of ZAMP.

“As of today, we decided to stop playing Macedonian music. Either way, we risk legal repercussions and steep fines,” one editor-in-chief of a regional radio station told BIRN under condition of anonymity.

And so, if you happen to be reading this in Macedonia at the time of this writing, you apparently can't hear any music made within that country on the radio. ZAMP took a dispute over how much money it got to collect as the only collection group in the country and managed to reduce that amount of money to absolutely zero by banning that music from broadcasts entirely. Seems like a recipe for new legislation that will further neuter ZAMP, as one imagines the artists it represents will be screaming bloody murder any moment now.

But, yeah, copyright doesn't hinder culture at all.

Filed Under: collection societies, copyright, macedonia, music, pros, rights organizations
Companies: sokom map, zamp

BMI Records Record Revenue... While Whining To DOJ That It Can't Function Under Antitrust Agreement

from the something-doesn't-add-up-here dept

As we've been discussing, the two big music collection societies in the US, ASCAP and BMI, are desperately fighting to get the DOJ to alter (or end entirely) the "consent agreement" that they operate under. The consent agreement, in various forms, has been in place for decades, after the DOJ properly recognized that in licensing songwriters' and publishers' public performance rights, they had something of a monopoly. And monopolies can be dangerous when abused. Thus the consent decree to keep the organizations in line. However, both are really angry about this, in large part because they believe that without the consent decree, they could create a world in which they could force everyone to have to pay much higher fees (you can see some of how they tried to collude with publishers to jack up rates to Pandora).

So far, the attempt to get rid of the consent decree has not been going well. It has resulted in more investigations into the publishers for collusion for one thing. The DOJ has also apparently realized that the collection society's treatment of songs with multiple copyright holders may be another anti-trust violation.

And, yet, ASCAP and BMI keep trying to convince everyone that they're suffering under this "obsolete" consent decree, and they need to have it modified greatly. BMI, in comments to the DOJ, has claimed that it's suffocating under the current system, which it says is "broken":

The digital revolution in information processing and communications has completely transformed the way music performances are heard by the public and equally changed the way in which information about music performances is collected and processed. In particular, the rise of Internet streaming as a principal way the public hears performances of music has created market needs that are now not being met because of inefficient and anticompetitive restrictions in the BMI consent decree that serve no sound purpose today.

There is an urgent need for action now. BMI agrees with the Register of Copyrights’ recent testimony characterizing music licensing as “broken,” and certain aspects of the BMI consent decree have contributed to that breakdown. The decree creates rigidities and restrictions in the way BMI must operate that undermine BMI’s efficiency as a resource for both music users and music copyright owners in the digital world. The existing rate court mechanism has proven too slow, too expensive, and too legalistic to keep up with the speed of change in real-world markets today. The need is so dire that, rather than press for comprehensive reform at this point, in these public comments BMI urges the Department to prioritize particular changes that address these immediate needs.

Things must really suck for BMI and all the songwriters who get paid via BMI, right? Oh... wait. BMI has just announced a new record in revenue collection and pay out to artists.

BMI, whose full name is Broadcast Music Inc., collected $1.013 billion for the 12 months that ended in June, up almost 4 percent from the year before. That is slightly more than the $1.001 billion that its competitor Ascap took in last year.

In the number that will be scrutinized most closely by musicians — royalties — BMI paid slightly less than its rival. After deducting its operating expenses, BMI distributed $877 million to its thousands of members, including songwriters like Taylor Swift, Nile Rodgers and Adam Levine of Maroon 5. Last year, Ascap paid its members $883 million.

Why is it paying less than ASCAP? BMI doesn't blame the broken consent decree, but rather "significant legal costs" made up mainly of its lawsuit against Pandora. In other words, something that BMI had control over. The article also notes this little fact:

Since 2005, BMI’s collections have increased about 40 percent.

So, uh, can we hear again about how "dire" the situation is and how BMI can't function, even as its revenue has grown 40% in the last decade and it's setting all kinds of new records? Did BMI think the DOJ would just ignore that bit?

Filed Under: anti-trust, antitrust, collection societies, consent decree, doj, pros, publishers, revenue, songwriters
Companies: ascap, bmi

Split Works Debate Raises Thorny Issues For Music Companies (And For The Rest Of Us)

from the what's-a-free-market dept

Michael Corleone would understand. Just when music companies and their performance-rights organization (PROs) thought they were getting out from under supervision by the U.S. Department of Justice, the DOJ may be about to pull them back in.

For some time now, the DOJ's Antitrust Division has been investigating whether to modify the special antitrust consent decrees that govern the two leading PROs: the American Society of Composers And Publishers (ASCAP) and Broadcast Music Inc. (BMI). These broad settlements, originally reached in 1941, were designed to prevent anti-competitive behavior by the music publishers and set the rules for how the PROs can operate. This includes licensing on non-discriminatory terms (preventing the PROs from blocking a radio station or music service from playing their songs).

The consent decrees have been modified before; BMI's was amended in 1994 and ASCAP's in 2001. But some music publishers argue these agreements are showing their age. The publishers and the PROs are hoping (and expressly asking) the DOJ to agree with their view that, here in the Internet Era, digital music doesn't need so much government intervention. Some suggest the DOJ's antitrust lawyers have shown sympathy to arguments for a "partial withdrawal" of digital copyrights from the consent-decree framework.

But new arrangements to replace that framework ultimately may pull the labels and PROs back in. Billboard reported recently that the DOJ may be considering revisions that impose an even tighter regulatory scheme. According to the report, the Justice Department circulated a letter letting ASCAP and BMI know it is considering allowing any single co-owner of a "split work" — also known as a "fractional, "co-authored" or "co-pub" composition — to issue a license for 100 percent of the work. This is in contrast to the current practice in the music industry, whereby everyone who has a piece of the copyright needs to agree to license the work. The music companies have let their resulting unhappiness be known, albeit only off-the-record.

Not everyone has been so unhappy with the DOJ trial balloon on split works. Billboard quoted streaming service Pandora as saying: "We appreciate that the Department of Justice is taking steps to prevent further anti-competitive behavior in music licensing." Matt Schruers of the Disruptive Competition Project has framed the reported DOJ inquiry as actively pro-competition. Per Schruers, the music industry has created "artificial gridlock" among its rights-holders by allowing each co-author the power to unilaterally veto, but not unilaterally authorize, the license to use a copyrighted song. This means that a single rights-holder with only a small percentage of ownership in the work may pull the work when a licensing agreement ends, or deny a license to begin with.

These sorts of unilateral decisions by fractional rights-holders have been costly to services like Pandora Radio. Two years ago, Universal Music Publishing Group, owners of at least fractional rights in 20 percent of the music in the BMI catalog, withdrew its digital rights from BMI, a move that was followed by doubling the rates it sought to charge Pandora. And in another example, a different publisher, BMG, also withdrew its rights, but in this instance the result was Pandora took down all of BMGs wholly owned works and Pandora's customers were cut off from a substantial trove of the BMG catalog.

Is this what Congress intended with its last major revision of the Copyright Act, back in 1976? It doesn't appear so. Contemporary reports from the U.S. House summarizing the changes conclude:

"Under the bill, as under the present [pre-1976] law, coowners of a copyright would be treated generally as tenants in common, with each coowner having an independent right to use or license the use of a work, subject to a duty of accounting to the other coowners for any profits."

That's not always how split works licensing model operates today, as the UMG example demonstrates. To license use of a song, Internet companies may end up having to cut separate deals with each fractional rights-holder. More deals mean more transaction costs, as well as more potential dissenters with the power to scuttle those deals. The process is particularly onerous for new potential entrants to the digital market, and the leverage enjoyed by the major labels and publishers only grows as they continue to consolidate. Today, Sony alone controls nearly half of all royalties collected.

The purpose of copyright is not merely to provide monopoly revenue streams to content companies, but to ensure that creative works actually reach the public. Thus, for the DOJ to clarify obligations under the decades-old consent decrees could make sense. Allowing fractional rights-holders to authorize use of a work unilaterally is one potential avenue to untangle the complex web of rights in music and bring the licensing system more in-line with those of other copyrighted works with multiple authors.

To be clear, no one is asking to eliminate the consent decrees, even though all sides officially say they favor competition and the free market. Ironically, those who laud the competition they say would follow from allowing rights-holders to "partially withdraw" digital music rights tend to fear simplification of the system as a whole, precisely because would make competition among rights-holders more likely.

For instance, they oppose allowing fractional rights-holders to license joint-authored songs on grounds that this would create a "race to the bottom" in digital copyright licensing, lowering prices that could be commanded on the open market. Publishers and PROs thus must find a way to thread the needle in arguing both that the free market commands we let them partially withdraw digital rights and that the free market is lousy when co-authors compete with one another on price.

Any recommended modifications by the DOJ would have to be agreed to by the PROs and then approved by a court. In the meantime, we need a more robust public conversation around how to handle thorny issues like split works. Of course there's an irreducible tension between (a) the "exclusive rights" held by rights-holders in their "writings and discoveries" ("exclusive rights" just means the power to "exclude" non-rights-holders' use) and (b) the goal of the U.S. Constitution's Progress Clause, which gives Congress the power to grant such rights to "promote the progress of science and the useful arts" for rights-holders and non-rights-holders alike.

There are a few things about which almost everyone in this conversation already agrees: markets should be competitive; the public has an interest in copyright; and public policy should meet its Constitutional aim to encourage both creative and technological innovation. We can't help but wish, in navigating this thicket of thorny issues, we were discovering simpler arguments and simpler solutions.

Mike Godwin is General Counsel and Director of Innovation Policy at R Street Institute. Sasha Moss is a Google Policy Fellow at R Street Institute.

Filed Under: collection society, competition, consent decree, doj, fractional licensing, free market, licensing, music, pros, split works
Companies: ascap, bmi, sony music, universal music

Bizarre Combo Rulings From EU Court Of Justice: Dentists Don't Have To Pay Music Royalties, But Hotels Do

from the see-if-you-can-figure-it-out dept

Over the last few years, collection societies have become ridiculously aggressive in trying to get just about anyone to pay up for playing music. The results have been rather crazy, with auto garages being told that they have to pay up because the mechanics out in the garage had the radio on loud enough that customers in the waiting room could hear it. Ditto for a police station where some officers had a radio on in the back, but which some of the public could hear in the front. Then there was the demand that a grocery story pay up because a shop assistant sang while stacking cans. And the craziest of all: the time when the owner of a horse stable was told to pay up because her horses liked listening to music.

A lot of this comes from the simple fact that these collection societies are really just trying to squeeze as much excess revenue as they can out of any location they can find. It's gotten to the point where the "copyright investigators" are really sales people, and are given incentives just like a sales person. They have revenue targets with bonuses for extra revenue they bring in. This gives them incentives to do all sorts of crazy things... like randomly calling up small businesses and if they hear any music in the background, demanding a license.

Thankfully, it appears that the EU Court of Justice is pushing back on some of that. It recently issued two rulings about royalty collections -- but unfortunately it seems like the two rulings conflict with each other in some ways. In one, it is determined that a dentist's office does not need to pay a royalty because patients don't go to the dentist for the music:

Finally, it cannot be disputed that, in a situation such as that in the main proceedings, a dentist who broadcasts phonograms, by way of background music, in the presence of his patients cannot reasonably either expect a rise in the number of patients because of that broadcast alone or increase the price of the treatment he provides. Therefore, such a broadcast is not liable, in itself, to have an impact on the income of that dentist.

The patients of a dentist visit a dental practice with the sole objective of receiving treatment, as the broadcasting of phonograms is in no way a part of dental treatment. They have access to certain phonograms by chance and without any active choice on their part, according to the time of their arrival at the practice and the length of time they wait and the nature of the treatment they undergo. Accordingly, it cannot be presumed that the usual customers of a dentist are receptive as regards the broadcast in question.

Consequently such a broadcast is not of a profit-making nature...

Of course, you could make the identical argument about music playing in all sorts of places. But, at the very least, it certainly suggests that the music playing at an auto mechanic's garage or a police station are not subject to royalty collections under EU law.

But then there's the other ruling. The exact same court. The exact same panel of judges. The exact same day. Very different ruling. This one involved a hotel, and the question of whether or not music playing in the hotel rooms is subject to collections. And here, the court comes to the opposite conclusion, and says that the hotel must pay.

In a press statement, the Court said that since music in hotels is broadcast to an "indeterminate number of potential listeners" and is "of a profit-making nature" hoteliers are liable for royalty payments. It added that broadcasting music constitutes an "additional service which has an influence on the hotel's standing and, therefore, on the price of rooms."

I'm having difficulty figuring out the difference here. The article linked above notes that these rulings hinge on "the concept of public" which is based on "'an indeterminate number of potential listeners and a fairly large number of persons,' alongside the question of a profit motive." However, it seems like a total judgment call in either case as to whether or not there is a "fairly large number of persons" and just where "the profit motive" comes into play. Both dentists and hotels have a profit motive, and both play music in part because of that reason. But it's arguable as to whether or not the music has a direct impact on actual profits in either case. In the end, the pair of rulings just seems to leave everything a lot more confused, rather than clarified in any way.

Filed Under: collection societies, dentist offices, eu, hotels, music, pros, royalties

More People Realizing That ASCAP And BMI Are Killing Local Music Scenes

from the stomping-them-out dept

The Guardian recently had an article wondering if "the internet" was killing the idea of the local music scene with a "local sound." In discussing that article, Glyn Moody says it's much more likely that it's absurd licensing regimes that are killing local scenes. Indeed. This is something we've discussed for a few years. The excessive demands of licensing and collection societies have really damaged local music scenes harming countless up-and-coming musicians by closing down the main venue for most new musicians to build up their performance chops through demands for ridiculous and excessive licenses.

It seems that more people are noticing this.

The Boston Globe recently had an article highlighting how these practices are incredibly damaging for local music scenes:

Across New England, church coffeehouses, library cafes, and eateries that pass the hat to pay local musicians or open their doors to casual jam sessions are experiencing a crackdown by performance rights organizations, or PROs, which collect royalties for songwriters.

The FurdLog blog wonders that if people say downloading unauthorized material is "theft," then what should we call this practice of performance rights organizations bullying small venues around the country into closing. What a shame. It's really stunning how much harm ASCAP, BMI and SESAC are doing for musicians -- the very people they're supposed to help.

Filed Under: collection societies, music, open mic, pros
Companies: ascap, bmi, sesac