Month: July 2018

HFA is Getting Blamed Unfairly

 

afriendinneed
A Friend In Need

When you’ve been around as long as the Harry Fox Agency, you’re going to make some enemies, screw some things up, over react and over reach.  You’re also going to do a lot of things right, make some friends and do some good.  But most of all, you’re going to be the whipping boy for your client’s enemies, screwups, overreacting and over reaching.

From one whipping boy to another, that’s just not fair and anyone who has ever tried to do anything really hard with data in the music business knows it.  So pish and pshaw on those who gang up on HFA in the debate on the Music Modernization Act.  Let’s look at the facts.

When HFA developed the first digital download mechanical license in the late 1990s, the current crop of critics were nowhere to be seen.  Was it a perfect solution?  Not entirely, no.  But it did work and business got done and songwriters made money.  We were all feeling our way along the digital precipice and making it up as we went along.

I will go out on a limb here and say that if it weren’t for people like HFA’s Ed Murphy, it’s entirely possible that there would be no “streaming mechanical” at all.  That would be the same Ed Murphy who stepped up and licensed Napster’s effort at a p2p subscription service in 2001.  Again, the current crop of critics were nowhere to be seen.

Here’s another fact that you won’t hear about.  When it came time to mete out justice to a massive infringer record company who had been ripping off Texas singer-songwriters for years and years, it was HFA who stood with us.  Not because they made money, not because there was some pot of gold for them–there wasn’t and they didn’t.

They did it because it was the right thing to do.

They may not be choir boys, but they have their moments.  When we really needed them, they showed up for Texas songwriters.  And that’s how we measure friendship in my part of the world.

HFA is often blamed for the Spotify meltdown which in its own way led directly to the controversial safe harbor in the Music Modernization Act.  You can tell that’s true because the MMA’s proponents never talk about the safe harbor except to say that they negotiated away the rights of all the world’s songwriters in some “grand bargain,” the grandness of which elludes me almost as much as the legitimacy of consent.

The fact that Spotify chose to go forward without all the rights necessary to do business is not HFA’s fault.  It is Spotify’s fault.  If Spotify has an issue with HFA, that’s between them.  Ultimately, Spotify knew what it was doing and I seriously, seriously doubt that HFA told them otherwise.  I won’t believe it without both pictures and tapes.

Another fact is that the clearance problems that Spotify and some other HFA clients have were set in motion well before SESAC’s acquisition of HFA in 2015.   If anything, HFA’s been doing it better and cleaner after the acquisition in my opinion.  So if there is blame to go around, then the blame should go all the way around.

You may hear some pretty nasty comments about HFA now that its parent’s parent company is lobbying for a seat at the table on the Music Modernization Act.  Pay them no mind.  If SESAC and HFA had been dealt in at the beginning of the MMA process–which it sounds like they were not along with a lot of other people who should have been there, too–then there’d be some actual evidence that they were reneging on a commitment instead of no evidence that a commitment was ever made.  If you’re going to bet the farm, don’t take silence as consent.

Bashing HFA won’t fix the failure to include them, and I for one think it’s really unfair.  The solution isn’t dealing them out, the solution is embracing SESAC and HFA by respecting their efforts to make MMA a better bill that will have a greater chance of flourishing.

@alibhamed: Pre-Seed Investing is Not About Check Size

[Interesting post by Ali Hamed about the goals of a pre-seed investment round]

Pre-Seed Investing, in my view, should not be defined by check size. I think a lot of people are tempted to describe a pre-seed investment as a “sub $1M investment,” or a ~$500k investment. And while directionally correct, or associated with seed rounds, likely isn’t their definition.

To me, a pre-seed round is a round of capital used for proving whether or not a product can be valuable to a customer.

One thing that has always bothered me is when seed investors, or pre-seed investors ask super cookie-cutter questions, like:

  • What is your monthly revenue?
  • What is your MoM growth?

To many investors, these are almost formulaic questions that define if they will take a meeting or not.

Read the post on Medium

Justice Department Antitrust Division Starts Terminating Legacy Antitrust Judgments–What Next for ASCAP, BMI and MMA

We’ve noted a few times that there’s a limited benefit to ASCAP and BMI from being involved with the Music Modernization Act (although fans of the bill have been dining out on their support for quite a while).  All of those benefits involve relief from the oppressive government control over songwriters through the ancient consent decrees that now mostly protect the MIC Coalition.

We’ve also pointed out that the new head of the Antitrust Division of the Department of Justice announced his plan to terminate the some 1,500 consent decrees that the DOJ uses to regulate commerce–more properly the role of the Congress, not the Justice Department.  Assistant Attorney General Makan Delrahim, the head of the Antitrust Division, has already said that he would review the ASCAP and BMI consent decrees, so this isn’t idle speculation.

This week, the AAG Delrahim put that plan in motion.  According to a DOJ press release, the Antitrust Division is terminating 19 consent decrees that are like the PRO consent decrees, more regulatory in nature than enforcement oriented.  Here’s the press release:

The Department of Justice’s Antitrust Division today filed a motion and supporting papers, seeking to terminate 19 “legacy” judgments in the District Court for the District of Columbia.  Today’s court filing is part of the Antitrust Division’s effort to terminate decades-old antitrust judgments that no longer serve their original purpose.

“Today we have taken an important next step toward eliminating antitrust judgments that no longer protect competition,” said Assistant Attorney General for Antitrust, Makan Delrahim.  “Today’s filing is the first of many that we will make in courts around the country in our effort to terminate obsolete judgments.”

In its motion filed today, the Antitrust Division explained that perpetual judgments rarely continue to protect competition, and those that are more than ten years old should be terminated absent compelling circumstances.  Other reasons for terminating the judgments include that essential terms of the judgment have been satisfied, most defendants likely no longer exist, the judgment largely prohibits that which the antitrust laws already prohibit, and market conditions likely have changed.  Each of these reasons suggests the judgments no longer serve to protect competition.

The Antitrust Division announced in April its initiative to terminate legacy antitrust judgments, stating that it would review all such judgments to identify those that no longer serve to protect competition.  In its prior announcement, the Antitrust Division set forth the process by which it would seek the termination of outdated judgments.  It also established a new public website (https://www.justice.gov/atr/JudgmentTermination) to serve as the primary source of information for the public regarding the initiative.

At the time that the Antitrust Division announced the initiative, it posted on its public website the legacy judgments in federal district court in Washington, D.C. and in Alexandria, Virginia.  After a 30-day public comment period, the Antitrust Division concluded that termination of these 19 judgments is appropriate.

Since the announcement of its initiative, the Antitrust Division has posted for public comment judgments in 19 additional federal district courts.  It will continue to post judgments periodically as review of those judgments by Antitrust Division attorneys is completed.

Members of the public are encouraged regularly to check the Antitrust Division’s Judgment Termination page on its website, www.justice.gov/atr/JudgmentTermination, for updates.  Members of the public also may subscribe to the mailing list (https://public.govdelivery.com/accounts/USDOJ/subscriber/new(link is external)) to receive notice of new postings to the website, including judgments that the Division has identified as appropriate for termination.

This is important because the latest version of the Music Modernization Act requires the DOJ to notify Congress if they intend to terminate the ASCAP and BMI consent decrees.  Just the ones that relate to songwriters, no others.

So once again, the Congress–which should be regulating songwriters in the first place if anyone is going to engage in that worthless task–isn’t requiring the DOJ to notify them of any of the hundreds and hundreds of other consent decrees that AAG Delrahim proposes to terminate.

The irony of this amendment should not be overlooked–if the DOJ stops improperly regulating songwriters beyond its enforcement powers, oh, no!  Congress must step in to defend the MIC Coalition’s multi trillion dollar market cap from those pesky anticompetitive songwriters.

Why should Congress butt in where it has been afraid to tread since before World War II?  The same body that “forgot” to raise the statutory mechanical royalty for 70 years?

What should happen is the DOJ should terminate the ASCAP and BMI consent decrees and continue in its oversight role for enforcement of the antitrust laws.  Surely this is not controversial.  We don’t need another amendment to the Music Modernization Act to slow down “modernization.”