Month: January 2025

UK Government’s AI Legislation is Defeated in the House of Lords

The new-ish UK government led by Labour Prime Minister Sir Keir Starmer faced a defeat in the House of Lords regarding their AI bill. The defeat was specifically about measures to protect copyrighted material from being used to train AI models without permission or compensation. Members of the House of Lords (known as “Peers”) voted 145 to 126 in favor of amendments to the UK Government’s Data (Use and Access) Bill, proposed by film director Beeban Tania Kidron, the Baroness Kidron (a “cross bench peer”) which aim to safeguard the intellectual property of creatives. Lady Kidron said:

There is a role in our economy for AI… and there is an opportunity for growth in the combination of AI and creative industries, but this forced marriage on slave terms is not it.

So there’s that. We need a film director in the Senate, don’t you think? Yes, let’s have one of those, please.

Bill Dies With Amendments

The amendments proposed by Baroness Kidron received cross-party support (what would be called “bi-partisan” in the US, but the UK has more than two political parties represented in Parliament). The amendments include provisions to ensure, among other things, that AI companies comply with UK copyright law, disclose the names and owners of web crawlers doing their dastardly deeds in the dark of the recesses of the Internet, and allow copyright owners to know when and how their work is used. It might even protect users of Microsoft or Google products from having their drafts crawled and scraped for AI training.

This defeat highlights the growing concerns within Parliament about the unregulated use of copyrighted material by major tech firms. Starmer’s Data (Use and Access) Bill was proposed by the UK government to excuse the use of copyrighted material by AI models. However, thanks in part to Lady Kidron it faced significant opposition in the House of Lords, leading to its defeat.

Here’s a summary of why it failed:

  1. Cross-Party Support for Amendments: The amendments proposed by Baroness Kidron received strong support from both Labour and Conservative peers. They argued that the bill needed stronger measures to protect the intellectual property of creatives.
  2. Transparency and Redress: The amendments aimed to improve transparency by requiring AI companies to disclose the names and owners of web crawlers and allowing copyright owners to know when and how their work is used.
  3. Government’s Preferred Option: The government suggested an “opt-out” system for text and data mining, which would allow AI developers to scrape copyrighted content unless rights holders actively opted out. This approach was heavily criticized as it would lead to widespread unauthorized use of intellectual property, or as we might say in Texas, that’s bullshit for starters.
  4. Economic Impact: Supporters of the amendments argued that the bill, in its original form, would transfer wealth from individual creatives and small businesses to big tech companies, undermining the sustainability of the UK’s creative industries. Because just like Google’s products, it was a thinly disguised wealth transfer.

The defeat highlights the growing concerns within Parliament about the unregulated use of copyrighted material by major tech firms and the need for stronger protections for creatives. several prominent artists voiced their opposition to the UK government’s AI bill. Sir Elton John and Sir Paul McCartney were among the most prominent critics. They argued that the government’s proposed changes would allow AI companies to use copyrighted material without proper compensation, which could threaten the livelihoods of artists, especially emerging ones.

Elton John expressed concerns that the bill would enable big tech companies to “ride roughshod over traditional copyright laws,” potentially diluting and threatening young artists’ earnings. As a fellow former member of Long John Baldry’s back up band, I say well done, Reg. Paul McCartney echoed these sentiments, emphasizing that the new laws would allow AI to rip off creators and hinder younger artists who might not have the means to protect their work–and frankly, the older artists don’t either when going up against Google and Microsoft, with backing by Softbank and freaking countries.

Their opposition highlights the broader concerns within the creative community like Ivors Academy and ECSA about the potential impact of AI on artists’ rights and earnings.

Role of the House of Lords

The House of Lords is one of the two houses of the UK Parliament, the other being the House of Commons. It plays a crucial role in the legislative process and functions as a revising chamber. Here are some key aspects of the House of Lords:

Functions of the House of Lords

  1. Scrutiny and Revision of Legislation:
    • The House of Lords reviews and scrutinizes bills passed by the House of Commons.
    • It can suggest amendments and revisions to bills, although it cannot ultimately block legislation.
  2. Debate and Deliberation:
    • The Lords engage in detailed debates on a wide range of issues, contributing their expertise and experience.
    • These debates can influence public opinion and policy-making.
  3. Committees:
    • The House of Lords has several committees that investigate specific issues, scrutinize government policies, and produce detailed reports.
    • Committees play a vital role in examining the impact of proposed legislation and holding the government to account.
  4. Checks and Balances:
    • The House of Lords acts as a check on the power of the House of Commons and the executive branch of the government.
    • It ensures that legislation is thoroughly examined and that diverse perspectives are considered.

Composition of the House of Lords

  • Life Peers: Appointed by the King on the advice of the Prime Minister, these members serve for life but do not pass on their titles.
  • Bishops: A number of senior bishops from the Church of England have seats in the House of Lords.
  • Hereditary Peers: A limited number of hereditary peers remain, but most hereditary peerages no longer carry the right to sit in the House of Lords.
  • Law Lords: Senior judges who used to sit in the House of Lords as the highest court of appeal, a function now transferred to the Supreme Court of the United Kingdom.

Limitations

While the House of Lords can delay legislation and suggest amendments, it does not have the power to prevent the House of Commons from passing laws. Its role is more about providing expertise, revising, and advising rather than blocking legislation.

Now What?

Following the defeat in the House of Lords, the government’s Data (Use and Access) Bill will need to be reconsidered by the UK government. They will have to decide whether to accept the amendments proposed by the Lords or to push back and attempt to pass the bill in its original form.

It’s not entirely unusual for Labour peers to vote against a Labour government, especially on issues where they have strong differing opinions or concerns. The House of Lords operates with a degree of independence of the House of Commons, where I would say it would be highly unusual for the government to lose a vote on something as visible at the AI issue.

The AI bill would no doubt be a “triple whip vote”, a strict instruction issued by a political party to its members usually in the House of Commons (in this case the Labour Party), requiring them to attend a vote and vote according to the party’s official stance to support the Government. It’s the most serious form of voting instruction, indicating that the vote is crucial and that party discipline must be strictly enforced. Despite the sadomasochistic overtones of a “triple whip” familiar as caning to British public school boys, peers in the Lords often vote based on their own judgment and expertise rather than strict party lines. This can lead to situations where Labour peers might oppose government proposals if they believe it is in the best interest of the public or aligns with their principles. Imagine that!

So, while it’s not the norm, it’s also not entirely unexpected for Labour peers to vote against a Labour government when significant issues are at stake like, oh say the destruction of the British creative industries.

Crucially, the government is currently consulting on the issue of text and data mining through the Intellectual Property Office. The IPO is accepting public comments on the AI proposals with a deadline of February 25, 2025. This feedback will likely influence their next steps. Did I say that the IPO is accepting public comments, even from Americans? Hint, hint. Read all about the IPO consultation here.

Big Tech’s Misapprehensions About the AI Appropriation Invasion: Artist Rights are Not “Regulation”

It was a rough morning. I ran across both reports from Davos where they are busy blowing AI bubbles yet again and also read about a leading Silicon Valley apologist discussing the current crop of AI litigation. That was nauseating. But once the bile settled down, I had a realization: This is all straight out of the Woodrow Wilson rule-by-technocrats playbook.

Wilson believed that experts and intellectuals, rather than the voting public, should guide the creation and implementation of public policy. The very model of a modern technocrat. The present day technocrats and their enablers in the legal profession are heirs to Wilsonian rule by experts. They view copyright and other human rights of artists as regulation impeding innovation. Innovation is the godhead to which all mankind must–emphasis on must–aspire, whether mankind likes it or not.

Not human rights–artist rights are human rights, so that proposition cannot be allowed. The technocrats want to normalize “innovation” as the superior value that need not be humanized or even explained. Artist rights must yield and even be shattered in the advance of “innovation”. The risible Lessig is already talking about “the right to train” for AI, a human rights exception you can drive a tank through as is his want in the coin-operated policy laundry. In Wilsonian tradition, we are asked to believe that public policy must be the handmaiden to appropriation by technology even if by doing so the experts destroy culture.

We went through this before with Internet piracy. There are many familiar faces in the legal profession showing up on AI cases who were just getting warmed up on the piracy cases of the 1999-2015 period that did their best to grind artist rights into bits. AI is far beyond the massive theft and wealth transfer that put a generation of acolyte children through prep school and higher education. AI takes extracting profit from cultural appropriation to a whole new level–it’s like shoplifting compared to carpet bombing.

“I got the shotgun, you got the brief case…”

And since the AI lawyers are fascinated by Nazi metaphors, let me give you one myself: Internet piracy is to Guernica what AI is to Warsaw. The Luftwaffe was essentially on a training run when they bombed Guernica during the Spanish Civil War. Guernica was a warm up act; the main event was carpet bombing a culture out of existence in Warsaw and after. It was all about the Luftwaffe testing and refining their aerial bombing tactics that opened the door to hell and allowed Satan to walk the Earth swishing his tail as he does to this day. But in the words of Stefan Starzyński, the Mayor of Warsaw who broadcast through the German attack, “We are fighting for our freedom, for our honor, and for our future. We will not surrender.”

This is what these crusader technocrats do not seem to understand no matter how they enrich themselves from the wealth transfer of cultural appropriation. AI litigation and policy confrontation is not about the money–there is no license fee big enough and nobody trusts Silicon Valley to give a straight count in any event.

Artists, songwriters, authors and other creators have nowhere to go. The battle of human rights against the AI appropriation invasion may well be humanity’s last stand.

Must See Iron Mountain Webinar on Survivability of Digital Media

“God gave Noah the rainbow sign, no more water, the fire next time.”
James Baldwin

As we keep hearing how high end home studios burned in the Palisades fire, preservation becomes increasingly vital knowledge.

Key Webinar Topics:

• The alarming trend of failure of archived hard drives from the 1990s

• Evolution of music production and storage technologies

• Challenges in accessing and preserving digital music assets

• Best practices for digital archiving and metadata management

• The future of music asset preservation, and how AI will play a role

@RepRichHudson: Another reason why the best online security is to be offline

It comes full circle–Chief Justice Roberts raises some of the same issues as I raised in 2020 at MusicBiz

The Chief asks the most relevant foundational question in the first five minutes–and it was straight downhill for TikTok after that. See transcript at p. 8.

TikTok v Garland Transcript Oral Argument 24-656_1an2Download

And see the class materials from the MusicBiz Association Conference panel I moderated in 2020

musicbiz-tiktok-materials-v-2-2Download

@FTC: AI (and other) Companies: Quietly Changing Your Terms of Service Could Be Unfair or Deceptive

An important position paper from the Federal Trade Commission about AI (emphasis mine where indicated):

You may have heard that “data is the new oil”—in other words, data is the critical raw material that drives innovation in tech and business, and like oil, it must be collected at a massive scale and then refined in order to be useful. And there is perhaps no data refinery as large-capacity and as data-hungry as AI.

Companies developing AI products, as we have noted, possess a continuous appetite for more and newer data, and they may find that the readiest source of crude data are their own userbases. But many of these companies also have privacy and data security policies in place to protect users’ information. These companies now face a potential conflict of interest: they have powerful business incentives to turn the abundant flow of user data into more fuel for their AI products, but they also have existing commitments to protect their users’ privacy….

It may be unfair or deceptive for a company to adopt more permissive data practices—for example, to start sharing consumers’ data with third parties or using that data for AI training—and to only inform consumers of this change through a surreptitious, retroactive amendment to its terms of service or privacy policy. (emphasis in original)…

The FTC will continue to bring actions against companies that engage in unfair or deceptive practices—including those that try to switch up the “rules of the game” on consumers by surreptitiously re-writing their privacy policies or terms of service to allow themselves free rein to use consumer data for product development. Ultimately, there’s nothing intelligent about obtaining artificial consent.

Read the post on FTC

What the Algocrats Want You to Believe: Weird Al’s Sandwich

There are five key assumptions that support the streamer narrative and we will look at them each in turn. I introduced assumption #1: Streamers are not in the music business, they are in the data business, and assumption #2 : Spotify crying poor. Today we’ll assess assumption #3–streaming royalties are fair no matter what the artists and songwriters say. Like Weird Al.

Assumption 3: The Malthusian Algebra Claims Revenue Share Royalty Pools Are Fair

A corollary of Assumption 2 is that revenue royalty share deals are fair.  The way this scam works is that tech companies want to limit their royalty exposure by allocating a chunk of cash that is capped and throwing that bacon over the cage so the little people can fight over it.  This produces an implied per-stream rate instead of negotiating an express per stream rate.  Why?  So they can tell artists–and more importantly regulators, especially antitrust regulators—all the billions they pay “the music business”, whoever that is.

And yet, very few artists or songwriters can live off of streaming royalties, largely because the “big pool” method of hyper-efficient market share distribution that constantly adds mouths to feed is a race to the bottom. The realities of streaming economics should sound familiar to anyone who studied the work of the British economist and demographer Thomas Malthus. Malthus is best known for his theory on population growth in his 1798 book “An Essay on the Principle of Population”. This theory, often referred to as the Malthusian theory (which is why I call the big pool royalty model the “Malthusian algebra”), posits that population growth tends to outstrip food production, leading to inevitable shortages and suffering because, he argued, while food production increases arithmetically, population grows geometrically.

Signally, the big pool model allows the unfettered growth in the denominator while slowing growth in the revenue to increase market valuation based on a growth story. And, of course, the numerator (the productive output of any one artist) is limited by human capacity.

Per-Stream Rate = [Monthly Defined Revenue x (Your Streams ÷ All Streams)]

If the royalty was actually calculated as a fixed penny rate (as is the mechanicals paid by labels on physical and downloads), no artist would be fighting against all other artists for a scrap. In the true Malthus universe, populations increase until they overwhelm the available food supply, which causes humanity’s numbers to be reversed by pandemics, disease, famine, war, or other deadly problems–a Malthusian race to the bottom. Malthus may have inspired Darwin’s theory of natural selection. As a side note, the real attention to abysmal streaming royalties came during the COVID pandemic–which Malthus might have predicted.

Malthus believed that welfare for the poor, inadvertently encouraged marriages and larger families that the poor could not support1. He argued that the only way to break this cycle was to abolish welfare and championed a welfare law revision in 1834 that made conditions in workhouses less appealing than the lowest-paying jobs. You know, “Are there no prisons?” (Not a casual connection to Scrooge in A Christmas Carol.)

Crucially, the difference between Malthusian theory and the reality of streaming is that once artists deliver their tracks, Daniel Ek is indifferent to whether the streaming economics causes them to “die” or retire or actually starve to actual death. He’s already got the tracks and he’ll keep selling them forever like an evil self-licking ice cream cone.

As Daniel Ek told MusicAlly, “There is a narrative fallacy here, combined with the fact that, obviously, some artists that used to do well in the past may not do well in this future landscape, where you can’t record music once every three to four years and think that’s going to be enough.” This is kind of like TikTok bragging about how few children hung themselves in the latest black out challenge compared to the number of all children using the platform. Pretty Malthusian. It’s not a fallacy; it’s all too true.

Crucially, capping the royalty pool allowed Spotify to also cap their subscription rates for a decade or so. Cheap subscriptions drove Spotify’s growth rate and that also droves up their stock price.  You’ll never get rich off of streaming royalties, but Daniel Ek got even richer driving up Spotify’s share price. Daniel Ek’s net worth varies inversely to streaming rates–when he gets richer, you get poorer.

Weird Al’s Streaming Sandwich: Using forks and knives to eat their bacon

This race to the bottom is not lost on artists.  Al Yankovic, a card-carrying member of the pantheon of music parodists from Tom Leher to Spinal Tap to the Rutles, released a hysterical video about his “Spotify Wrapped” account.  

Al said he’d had 80 million streams and received enough cash from Spotify to buy a $12 sandwich.  This was from an artist who made a decades-long career from—parody.  Remember that–parody.

Do you think he really meant he actually got $12 for 80 million streams?  Or could that have been part of the gallows humor of calling out Spotify Wrapped as a propaganda tool for…Spotify?  Poking fun at the massive camouflage around the Malthusian algebra of streaming royalties? Gallows humor, indeed, because a lot of artists and especially songwriters are gradually collapsing as predicted by Malthus.

The services took the bait Al dangled, and they seized upon Al’s video poking fun at how ridiculously low Spotify payments are to make a point about how Al’s sandwich price couldn’t possibly be 80 million streams and if it were, it’s his label’s fault.  (Of course, if you ever worked at a label you know that if you haven’t figured out how anything and everything is the label’s fault, you just haven’t thought about it long enough.)

Nothing if not on message, right? Even if by doing so they commit the cardinal sin—don’t try to out-funny a comedian.  Or a parodist. Bad, bad idea.  (Classic example is Lessig trying to be funny with Stephen Colbert.) Just because Mom laughs at your jokes doesn’t mean you’re funny. And you run the risk of becoming the gag yourself because real comedians will escalate beyond anywhere you’re comfortable.

Weird Al from UHF

It turns out that I have some insight into Al’s thinking and I can tell you he’s a very, very smart guy. The sandwich gag was a joke that highlights the more profound point that streaming sucks. Remember, Al’s the one who turned Dr. Demento tapes into a brand that’s lasted many years.  We’ll see if Spotify’s business lasts as long as Weird Al’s career.

I’d suggest that Al was making the point that if you think of everyday goods, like bacon for example, in terms of how many streams you would have to sell in order to buy a pound of bacon, a dozen eggs, a gallon of gasoline, Internet access, or a sandwich in a nice restaurant, you start to understand that the joke really is on us.

What the Algocrats Want You to Believe: Spotify Crying Poor

There are five key assumptions that support the streamer narrative and we will look at them each in turn. I introduced assumption #1: Streamers are not in the music business, they are in the data business. That shouldn’t be a controversial thought. Today we’ll assess assumption #2–streamers like Spotify can’t make a profit.

Assumption #2: Spotify can’t make a profit.

Spotify commonly tells you that they pay 70% of their “revenue” to “the music business” in the “big pool” royalty method.  The assumption they want you to make is that they pay billions and if it doesn’t trickle down to artists and songwriters, it’s not their fault.

Remember The Trichordist Streaming Price Bible? If you recall, the abysmal per-stream rates that made headlines were derived by “a mid-sized indie label with an approximately 350+ album catalog now generating over 1.5b streams annually.” Those penny rates were not the artist share, they were derived at the label level. The artist share had to be even worse. And those rates were in 2020–we’ve since had five years of the expansion of the denominator without an offsetting increase in revenues.

Streamers will avoid discussing penny rates like the plague because the rates are just so awful and paupering. They do this by gaslighting–not only artists and songwriters, but also gaslighting regulators. They will tell you that they pay billions “to the music industry” and don’t pay on a per-stream basis so nothing to see here. But they omit the fact that even if they make a lump sum payment to labels or distributors, those labels or distributors have to break down that lump sum to per stream rates in order to account to their artists. So even if the streamers don’t account on a per-stream basis, there is an implied per-stream rate that is simple to derive. Which brings us full-circle to the Streaming Price Bible no matter how they gaslight that supposed 70% revenue share.

And then there’s a remaining 30% because the “revenue” share would have to sum to 100%, right?.  That’s true if you assume that the company’s actual revenue is defined the same way as the “revenue” they share with “the music business”.  Is it?  I think not.  I think the actual revenue is higher, and perhaps much higher than the “revenue” as defined in Spotify’s licensing agreements.

Crucially, Spotify’s cash benefits exceed the “revenue” definition on which they account if you don’t ignore the stock market valuation that has made Daniel Ek a billionaire and many Spotify employees into millionaires.  Spotify throws off an awful lot of cash for millionaires and billionaires for a company that can’t make a profit.

Good thing that artists and songwriters got compensated for the value their music added to Spotify’s market capitalization and the monetization of all the fans they send to Spotify, right?  

Oh yeah. They don’t.

What the Algocrats Want You to Believe

There are five key assumptions that support the streamer narrative and we will look at them each in turn. Today we’ll assess assumption #1–streamers are not in the music business but they want you to believe the opposite.

Assumption 1:  Streamers Are In the Music Business

Streamers like Spotify, TikTok and YouTube are not in the music business.  They are in the data business.  Why?  So they can monetize your fans that you drive to them.

These companies make extensive use of algorithms and artificial intelligence in their business, especially to sell targeted advertising.  This has a direct impact on your ability to compete with enterprise playlists and fake tracks–or what you might call “decoy footprints”–as identified by Liz Pelly’s exceptional journalism in her new book (did I say it’s on sale now?).

Signally, while Spotify artificially capped its subscription rates for over ten years in order to convince Wall Street of its growth story, the company definitely did not cap its advertising rates which are based on an auction model like YouTube.  Like YouTube, Spotify collects emotional data (analyzing a user social media posts), demographics (age, gender, location, geofencing), behavioral data (listening habits, interests), and contextual data (serving ads in relevant moments like breakfast, lunch, dinner).  They also use geofencing to target users by regions, cities, postal codes, and even Designated Market Areas (DMAs). My bet is that they can tell if you’re looking at men’s suits in ML Liddy’s (San Angelo or Ft. Worth).

Why the snooping? They do this to monetize your fans.  Sometimes they break the law, such as Spotify’s $5.5 million fine by Swedish authorities for violating Europe’s data protection laws.

They’ll also tell you that streamers are all up in introducing fans to new music or what they call “discovery.” The truth is that they could just as easily be introducing you to a new brand of Spam. “Discovery” is just a data application for the thousands of employees of these companies who form the algocracy who make far more money on average than any songwriter or musician does on average.  As Maria Schneider anointed the algocracy in her eponymous Pulitzer Prize finalist album, these are the Data Lords.  And I gather from Liz Pelly’s book that it’s starting to look like “discovery” is just another form of payola behind the scenes.

It also must be said that these algocrats tend to run together which makes any bright line between the companies harder to define.  For example, Spotify has phased out owning data centers and migrated its extensive data operations to the Google Cloud Platform which means Spotify is arguably entirely dependent on Google for a significant part of its data business.  Yes, the dominant music streaming platform Spotify collaborates with the adjudicated monopolist Google for its data monetization operations.  Not to mention the Meta pixel class action controversy—”It’s believed that Spotify may have installed a tracking tool on its website called the Meta pixel that can be used to gather data about website visitors and share it with Meta. Specifically, [attorneys] suspect that Spotify may have used the Meta pixel to track which videos its users have watched on Spotify.com and send that information to Meta along with each person’s Facebook ID.”

And remember, Spotify doesn’t allow AI training on the music and metadata on its platform.  

Right. That’s the good news.