Jan 30 Save the Date! T Bone Burnett in Conversation with Jonathan Taplin in Los Angeles on The Value of the Artist

T Bone Burnett
in conversation Jonathan Taplin on The Value of the Artist, and the Value of Art
Monday, January 30, 2017
8pm
Ann and Jerry Moss Theatre

New Roads School
Herb Alpert Educational Village
3131 Olympic Boulevard
Santa Monica, CA 90404

Reserve seating, click here for ticketing.

This will be an inspiring evening with two of the deep thinkers in the artist rights movement!

Mass NOI Update:  Christopher Sabec and Rightscorp Tackle the Songwriters’ Copyright Office Problem 

We’re going to assume that readers know the general background on the millions of “address unknown” NOIs filed with the Copyright Office under a loophole in the Copyright Act (Sec. 115(c)(1)).

The nutshell summary:  Starting April of last year,  Google, Amazon, Pandora and other on-demand digital services using compulsory licenses began filing very large numbers of “address unknown NOIs” for compulsory mechanical licenses with the Copyright Office.  These filings were implemented through a taxpayer funded customized electronic filing process that allows services to exploit songs for free–no royalty is payable.  The Copyright Office created this customized platform for these services about the time that the Copyright Office announced a reduced fee structure for this customized electronic filing process that increases the burden on songwriters.  (Even though Pandora has yet to launch its on-demand music service, Pandora appears to have served the Copyright Office with well over 1,000,000 address unknown NOIs.  Since it’s early days, we can probably expect that number to increase, perhaps dramatically.)

The Copyright Office then posts these “address unknown” filings one-by-one as part of the public record of the Copyright Office, apparently so that songwriters can find out if their songs are being used.

There are no reciprocal countermeasures provided by either the Library of Congress or the Copyright Office.  We’ve posted about this process before and Billboard reported on Music Reports, Inc.’s involvement in supporting the entire filing but has yet to report on the scope of the problem.

The two key differences between serving an “address unknown” NOI and serving a “regular” NOI is that the “address unknown” NOI is served on the Copyright Office instead of the copyright owner and the  digital music service never sends an accounting or a royalty payment.

At such time-if ever-that the song copyright owner identifies themselves in the Copyright Office, which the copyright owner is not obligated to do under US law or the Berne Convention, statutory royalties will be payable thereafter–not retroactively.  That mess is unlikely to ever get sorted.

I’d sum it up by saying that in my view anyone who participates in this mass NOI filing is manipulating a loophole in the law as a way of forcing copyright owners to let their songs be used for free.

Rightscorp has developed a proprietary database to assist songwriters with sorting out this mess and we interviewed Rightscorp CEO Christopher Sabec about the process for Music Tech Solutions.

Chris Castle:  Thanks for participating in our interview today on the “mass NOI” filing.  Why don’t you start by telling readers the 10,000 foot view of your resume and what Rightscorp does, especially in the landmark BMG v. Cox case, currently on appeal.

Christopher Sabec
: I am the co-founder and CEO of Rightscorp, Inc, which is a leading provider of data and analytic services to support artists, songwriters and owners of intellectual property. We assist rights holders by monitoring and monetizing their copyrights on peer-to-peer networks such as BitTorrent. We also provide data and support for DMCA litigation, most recently supporting BMG with gathering evidence, assisting with e-discovery and providing testimony in their groundbreaking litigation against Cox Communications. [BMG won a $25 million damages award against Cox that is currently on appeal.]  I am an attorney by training and in the past, I have served as CEO of the Jerry Garcia Estate LLC, discovered and managed the rock band Hanson, and represented Dave Matthews in the early years.

Castle: So you’re coming at this from the artist/songwriter/copyright owner side of the desk?

Sabec: Correct. We are dedicated to the vision that creative works should be protected economically on the Internet so that the next generation of great music, movies, and other content can be made and creators can prosper.

Castle:   You’ve had a chance to look at some of these mass NOI filings and that’s what we’re going to focus on today.  Let’s start by giving readers an idea of the scope of these filings.

How many songs have you identified so far that have been filed with “address unknown” NOIs?

Sabec:  As of January 18, we have identified more than 25.6 million address unknown NOIs that have been filed with the Copyright Office.

Castle:  That is a mind-numbing number.  How easy is it for any songwriter to search for themselves in these “address unknown” filings to see if the NOIs were even filed correctly since the Copyright Office does nothing?

Sabec: It would be a huge manual process. It would require downloading all the individual mass filings, sorting through them to look for particular copyrights, and creating reports that would makes sense of the volume of data. We don’t see this as an easily achieved manual process.

Castle:  So the Copyright Office has not set up a searchable database for these filings?

Sabec: No. The Copyright Office just publishes the filings as they are received, placing the burden of sorting the information on the songwriters and rights holders.

Castle:  That sounds like the songwriter is effectively not able to find themselves in the Copyright Office filings?

Sabec: It’s a true needle-in-a-haystack situation.

Castle:   When I looked through these filings, I found a number of songs that I recognized that were clearly identifiable and were registered for copyright long ago.  Did you find any songs like that when you sampled the NOI filings?

Sabec: Yes, we found songs by top artists and songwriters, and verified there are copyrights on-file with the Copyright Office for these works.  Examples would be Taylor Swift, Alan Jackson, The Eagles, Disney musicals, many other recognizable and–more importantly–findable song copyright owners.

Castle:  Which means that those copyrights should not be subject to “address unknown” NOI filings because their address is known.

From what I understand, Google is taking the position that if a song copyright owner is not identifiable in the public records of the Copyright Office Public Catalog, they treat it as address unknown.  I’ve also heard that Google is refusing to accept address changes directly from copyright owners for whom they already have a “regular” NOI relationship (or direct agreement) and are telling those copyright owners that they will only deal with them through the Copyright Office Public Search Catalog:

We now receive our data from the United States Copyright Office Public Catalog, as required by Section 115 of the US Copyright Act. If any of the information in the Notice is out of date, then please update your registration with the United States Library of Congress (http://copyright.gov). For more information on compulsory licenses, please visit: http://www.copyright.gov/circs/circ73.pdf.

The most immediate problem with this approach is that the Copyright Office Public Catalog clearly states that it only covers titles that were registered after 1978.  Pre-78 titles are on paper records at the Copyright Office.

Did you find any pre-78 songs in your sampling of the “address unknown” data?

Sabec: Yes, we found very well known songs from well known artists from the pre-1978 period. We also found songs from the pre-1978 period that have filed renewal registrations available in the Copyright Office Public Search Catalog.

Castle:  That’s odd because the Copyright Office puts users of their catalog search on notice that it only covers post-78 titles, as does the Library of Congress which sells this information out the back door for big fees.

Have you been able to afford the tens of thousands of dollars to purchase the Library of Congress database of copyright registrations and recordation to compare what’s been registered to what’s in the “address unknown” filings?

Sabec: No, we have not purchased the database.

Castle:   So it doesn’t appear that Google, Amazon or Pandora are doing anything in the way of searching the card catalog or using the many other resources available to it to find, say, The Beatles, The Rolling Stones, Garth Brooks, or Alan Jackson, not to mention songs from the pre-78 period?

Sabec:  No, it does not. And it makes no sense. We are cross referencing the NOIs and using the available Public Search Catalog to determine that many of these “address unknown” NOIs should not have been filed in the first place. Many owners are known and easily identifiable in the Public Records.

Castle:   What can the average songwriter do to find out if they’ve been forced into getting involved in this entire debacle?

Sabec:  This is a daunting task. It takes a lot of time and energy, and is a very expensive undertaking. Rightscorp are investing the time, energy, and money to solve this debacle and we intend to offer songwriters and rights-holders appropriate solutions.

Castle:  It sounds like you’re collecting the data that would allow you to be in the same position as whoever is filing all these “address unknown” NOIs.

Given that you have that data, what’s the next move for Rightscorp on these mass NOIs?

Sabec:  We intend to create a technological solution to this technological problem. We have already created a searchable database and can assist rights holders in determining the extent of their exposure. If a rights-holder would like to know more about our solution, I can be contacted at info@rightscorp.com

Castle:  Thanks for participating today, Christopher, please keep us informed of your next moves.

Blackstone Acquires SESAC: Is it all about one-stop shopping or is it the data?

“[P]rivate equity funds affiliated with Blackstone” yesterday announced the purchase of SESAC from another private equity group, Rizvi Traverse Management.

We hold our breath to see what the monopolists in the MIC Coalition will do about the sale.  In light of the new administration, it will be an interesting test of both to see if the monopolists in the MIC Coalition run to the nanny state again to try to stop the sale on some grotesquely hypocritical antitrust theory and equally interesting to see if the new administration entertains that idea.  It is almost a certainty that there will be a new head of the antitrust division of the Justice Department, so we’ll see.

But assuming that the sale goes through, it’s worth noting the story that Blackstone is telling in its press release.  We probably think of SESAC as being all about songwriters and publishers.  Songwriters did not get mentioned until the last couple sentences of the third paragraph of Blackstone’s press release.

It seems pretty clear from the press release that what Blackstone is valuing is the licensing infrastructure and data in SESAC followed closely by SESAC’s ability to do one-stop shopping on music licenses after its acquisition of HFA.  (The MIC Coalition has already complained to the DOJ about that.)  Remember–one-stop shopping was one of the improvements in the job killing ASCAP and BMI consent decrees that songwriters were interested in seeing implemented to empower ASCAP and BMI.

It is also worth noting that part of this value is that SESAC is not under the job-crushing regulations from the Department of Justice that have set wage and price controls on songwriters for 75 years.  That means that SESAC can actually engage in free market negotiations–real ones, not the ASCAP and BMI rate court version where judges in a faraway Eastern city pretend to set free market rates in a performance rights market that has effectively never been entirely free.  No wonder MIC Coalition likes other people’s consent decrees.

So while we know that it’s really all about the songwriters and relationships, investors seem at least as interested if not more interested in organizations that can offer licenses that contribute to solutions for the complexities of music licensing–preferably outside of the government mandated compulsory or near compulsory legacy licensing structure that seems to lumber on.

This is good news both for SESAC and for its competitors, and in the end we hope it’s also good for songwriters, too.  DOJ please take note.

 

Coming Soon: “The Circle”, The Movie: Dave Eggars Classic Takedown of Google starring Emma Watson and Tom Hanks

Coming Soon: “The Circle”, The Movie: Dave Eggars Classic Takedown of Google starring Emma Watson and Tom Hanks

via Coming Soon: “The Circle”, The Movie: Dave Eggars Classic Takedown of Google starring Emma Watson and Tom Hanks — Artist Rights Watch

Congress Brings Sanity to the Appointment of the Head of US Copyright Office

As you may have read, the newly appointed Librarian of Congress terminated the head of the U.S. Copyright Office (called the “Register of Copyrights”) through a process that I believe would be considered what’s called “retaliatory constructive termination”.  This is when an employer doesn’t actually fire an employee–usually a senior employee or whistleblower–but puts them in what is effectively a demoted position to make them miserable enough to quit and then announces that the person quit.

This hasn’t worked since Cinderella, and it doesn’t work today.  By demoting the Register of Copyrights, who was Maria Pallante, the new Librarian effectively fired her in a move that was condemned by two former Registers and both current and former Members of Congress as well as songwriters like Don Henley.  The firing was condemned as Google-backed chicanery by no less than the august Editorial Board of the Wall Street Journal.

No one should have been surprised when Pallante quit.

While several in the anti-copyright crowed crowed about Pallante’s demotion being business as usual because Pallante wanted greater independence for the Copyright Office, the justification that they gave was that the Librarian has the power to appoint the Register, so she also has the power to constructively terminate a Register that someone else appointed.  I guess they didn’t realize that they were actually strengthening Pallante’s constructive termination case if anybody cared to listen.

So it looks like somebody did care to listen–in the form of the House and Senate Judiciary Committees.  This is, after all, the Library of Congress after all.  If anybody forgot who they worked for, it now looks like that person was the Librarian, Dr. Carla Hayden.

The House Judiciary Committee has just issued a carefully worded policy paper regarding the appointment of the next Register–notwithstanding the rather mean spirited “and your little dog, too” justifications given by some in the anti-copyright crowd who are promoting the Library’s recent deal with the Berkman Center’s Digital Public Library of America to turn a digitized Library of Congress into a kind of feeder to Kickass Torrents with sovereign immunity.  (You won’t be surprised to learn that DPLA is overseen by at least one director formerly of the Google Books project.)

Here’s the money line from the House Memo:

Currently, the Register is not subject to the same nomination and consent process as other senior government officials.  To ensure that the American people have an opportunity to provide input into the selection of future Registers of Copyright through their elected officials, the next Register and all that follow should be subject to a nomination and consent process with a 10-year term limit, subject to potential re-nomination.

Let it not be lost on anyone that Congress is about to adjourn for the year and will return in January with a new Congress in a new session.  This memo served as a warning to the Librarian that Dr. Hayden should not get any further delusions of grandeur that manifested in appointing a new Register during the recess.  Not only should she not be thinking about a recess appointment, but she just lost the unilateral right to appoint the Register forever.

The Committee should be commended for coming up with a real solution to put a stop to what was a shabby little story of inside Washington back stabbing that was widely condemned by fair minded people everywhere and exposed the anti-copyright crowd for what they really are.

How President Trump Can Give Songwriters and Publishers Immediate Relief from DOJ and LOC Overreach

The Obama Department of Justice filed notice on November 11 that it intended to use the peoples money to appeal BMI Rate Court Judge Louis Stanton’s devastating ruling against the DOJ’s bizarre position on “100% licensing”.  Professor Steve Winogradsky and I summarized the results of the ruling in this post.

Aside from the terrible legal optics–the appeal is not unlike a prosecutor losing a capital murder case and then appealing–there is an overtly political aspect to the timing of the appeal as David Lowery has pointed out on The Trichordist.  Filed on a Friday in the “news dump” time slot immediately following a U.S. Presidential election, the filing was likely to be lost in the news hole.

Why appeal Judge Stanton?  First, there is the spite factor.  Given that the head of the Antitrust Division is Renata B. Hesse, a former outside lawyer for Google, it should not be a surprise to learn that division head was the driving force behind the 100% licensing position at the DOJ.  Given also that Judge Stanton, who has been interpreting the BMI consent decree for many, many years, was so decisive in ruling against the DOJ, that message should have been what every songwriter already knows.  The U.S. government’s position was Kafka-esque insanity that has been called out by everyone in the music business as well as Texas Governor Greg Abbott who called on Attorney General Lynch to abandon the DOJ’s position.

Whatever the back story, there is a simple solution to this problem–the incoming administration can simply dismiss the appeal.

How Did This Happen?

Internally at the Antitrust Division, it’s entirely likely that the decision to appeal this ruling was approved by Ms. Hesse.  Ms. Hesse was promoted to  acting associate attorney general, the DOJ’s third-highest ranking official–but will leave office without a confirmation hearing due in part to the timing of her appointment.  A prominent lawyer in the Big Tech legal community, Ms. Hesse is also well-known as someone who nearly exclusively represented Google during a revolving door hiatus in private practice where she protected the interests of the multinational media corporation.

mic-coalition-no-npr

Given her loyalties, it was natural for the Google-backed MIC Coalition to turn to Ms. Hesse when it wanted the government to attack SESAC, one of two U.S. based PROs not currently under consent decree.  (Read their letter here.)

hesse

It is hard to believe that the DOJ’s decision to appeal the 100% licensing case was taken without Ms. Hesse’s chop given the commitment of the people’s money involved in a lengthy appeal.  It is equally hard to believe that Ms. Hesse’s former client had no influence on her decision to grind the songwriters just a little while longer to make her point.

Whatever the motive behind the appeal, it must be said that the BMI ruling also undercuts another event near and dear to Google–the termination of Register of Copyrights Maria Pallante by recent Obama appointee Carla Hayden, the new Librarian of Congress.

As the Wall Street Journal Editorial Board notes:

There is some circumstantial evidence that Google’s lobbying influence was brought to bear in removing Ms. Pallante, though both Google and Ms. Pallante declined to talk to us. Google’s business model is essentially making money off other people’s content, and the company’s strategy has been to infringe on copyrighted material like books and fight it out later in court. The copyright office administers laws that protect owners.

For example, Ms. Pallante’s office opposed a Justice Department interpretation of licensing that would have undercut collaborations. As it happens, that change was reportedly pushed by a former outside counsel for Google who had moved over to Justice. Ms. Pallante’s view won in court.

Given the campaign to discredit Register Pallante, the Googlers now left in the bunker simply could not allow that home run by Register Pallante to stay on the scoreboard without going into extra innings with an appeal.

It should also not be forgotten that Songwriters of North America sued the DOJ over this very 100% licensing ruling, a case that is largely concerning the DOJ’s mishandling–which inevitably will mean Ms. Hesse’s mishandling–of the 100% licensing position and its refusal to provide written versions of the DOJ’s planned statement for public comment.  If the case survives summary judgement, the discovery could include the filing of this appeal as an extension of the mishandling of the process.

Finally, you have to wonder why the Obama Justice Department is trying to back their successors into a corner with this odd appeal so close in time to when the new President will take over.

But therein lies a simple solution to the entire caustic episode, however.  In a few weeks, the Department of Justice will have a new boss.  President Trump and his new Attorney General could easily decide to stand by the analysis of the subject matter expert–the BMI Rate Court Judge–and simply dismiss the case to end the madness.

 

 

Save the Date! Oct 13 in LA MUSIC 2020 Panel at @AIMPorg

I’m looking forward to participating on a great panel on fixing our future in the music business, moderated by the brilliant Dr. Gigi Johnson, founder and executive director of the UCLA Center for Music Innovation.

Music 2020: Recreating Music’s Future will be a lunch time panel held on October 13 in Los Angeles under the auspices of the Association of Independent Music Publishers an important voice for independent publishers in our policy efforts.  I’m part of an august group: Sam Kling, SVP Creative Operations, SESAC & AIMP Board Member and Vickie Nauman, Founder & Owner, CrossBorderWorks, both of whom I know to be deep thinkers on problem solving in our business.

The event is to be held at Lawry’s, 100 North La Cienega Blvd. (near Wilshire) in Beverly Hills from 11:30 am to 1:45 pm on October 13.  Reservations are required and lunch is served.  Tickets are $44 for AIMP members and $57 for non-members.

Click here to get to the AIMP website to sign up!