Now BMI takes on the US Radio industry

Last month, Irving Azoff’s US collection society, Global Music Rights (GMR), launched a legal attack on the Radio Music License Committee (RMLC), which represents over 10,000 commercial radio stations in the United States. The suit followed an action by the RMLC that moved that GMR be enjoined from licensing its catalogue of songs for more than a rate that represented the pro-rata share of its catalogue against those of the other PROs (primarily BMI and ASCAP, and SESAC) while its broader antitrust action is aimed at establishing an appropriate mechanism for determining those rates in the future - and forcing the rights agency to submit to independent arbitration to set the rates broadcasters must pay to play the songs it represents. Azoff formed GMR in 2013 to compete with ASCAP and BMI, which together control approximately 95% of music copyrights. The other independent and privately owned PRO in the USA, SESAC, recently entered into a settlement of with RMLC, following an antitrust action similar to the one filed against GMR.

Against a background of many songwriters and music publishers believing that commercial radio stations in the USA and elsewhere are paying far too little to use their work, GMR's lawsuit accused the RMLC of operating a ‘cartel’ which deliberately suppressed royalty payments to songwriters for music used across its network and targeted over 10,000 radio stations with an action that would have forced the stations to acquire a license in order to play music associated with any GMR songwriter artist (GMR have published a roster that includes Jay Z, The Eagles, Pharrell Williams, Adele, Daft Punk and hundreds more). One blip was that in response, heavy metal band Anthrax penned an open letter to Azoff for mistakenly including the band in the GMR "fair pay for fair play" lawsuit against the radio stations. The band suggested that whilst they have performed one song which is a composition by members of Metallica and Megadeth (the latter being represented by GMR) they are not represented by GMR and the error could discourage radio stations from playing Anthrax songs. 

On December 24th, GMR offered RMLC stations a temporary license to play songs by its clients. In a statement GWR said

"Today, GMR has offered a license to all radio stations represented by the RMLC allowing the stations to play GMR's repertoire in exchange for specified license fees. This license extends ‪through September 30th, 2017 and gives everyone additional time to negotiate long-term licenses with GMR. GMR offered this license to the RMLC last month, but the RMLC refused it and, instead, chose to sue and seek an injunction. With today's agreement, the RMLC has withdrawn its request for an injunction and radio stations across the country will have the opportunity to offer their listeners GMR's quality music."

Elsewhere, fellow PRO ASCAP has since re-signed a deal with RMLC for the next five years, covering its repertoire at a mutually agreed rate.

But the other major (and regulated) PRO BMI hasn't been so amenable.  The society has now filed an action in Federal Rate Court to set interim fees for radio stations represented by the RMLC – while BMI and the RMLC negotiate the terms of a new five-year deal beginning in 2017.

BMI said that the RMLC had "proposed an interim rate well below BMI‘s previous deal, the effect of which would have a significant impact on the royalties BMI pays to its songwriters, composers and music publishers" saying "The RMLC has justified its proposed rate based upon incomplete and incorrect information regarding BMI‘s radio performances. BMI disagrees fundamentally with the RMLC’s proposal and, consistent with past practices, is asking the Court to maintain its most recent rate while new terms are negotiated."

Mike Steinberg, Senior Vice President of Licensing for BMI, told reporters: “We attempted to negotiate in good faith with the RMLC for many months, and just before the end of the year, the RMLC presented an interim rate that significantly undervalues the work of BMI’s songwriters. Given the unmatched caliber of BMI‘s repertoire, our superior market share on radio, and the ever-increasing value that BMI music brings to the radio industry across all its platforms, we believe the RMLC’s proposal falls well short of what is in the best interests of our affiliates."

In an extreme version of a similar situation,  albeit here with a public service broadcaster, Bulgarian press reports said that as of 00.01 on January 1, 2017, Musicautor, Bulgaria’s non-profit society of composers, lyricists and music publishers, took action that has forced the country's national radio to play only music produced before 1945:  indeed, instead of hearing the official Bulgarian anthem at midnight, as they do every year, listeners to Bulgarian National Radio (BNR) heard an alternative version performed by BNR’s own choir and symphonic orchestra - and now have a diet of folk, classical and some jazz music. Musicautor, which hold the copyright to over 14,000,000 songs from Bulgarian and worldwide artists, suspended its contract with BNR and BNR is prevented from playing much contemporary Bulgarian and foreign music until the fee issue is resolved. The PRO has asked for a threefold increase in its payments, saying this would bring payments into line with those made by other European public radio broadcasters to use music.

http://www.balkaninsight.com/en/article/bulgarians-listen-to-classics-thanks-to-copyright-war-01-04-2017

http://www.musicbusinessworldwide.com/bmi-files-legal-action-radio-music-license-committee-royalty-rates/

http://www.rollingstone.com/music/news/anthrax-pen-open-letter-to-irving-azoff-over-licensing-w456455

http://variety.com/2016/music/news/global-music-rights-radio-rmlc-cartel-lawsuit-1201936083/

http://www.prnewswire.com/news-releases/global-music-rights-announces-license-extension-deal-with-radio-music-license-committee-300383532.html

US radio industry accuses Global Music Rights of monopoly abuse http://www.musiclawupdates.com/?p=7048

New Music Put the Seal on US Collective Management

Matthew Billy, who hosts a podcasts called Between the Liner Notes, contacted the 1709 Blog to inform us about a podcast episode on the turf battles between BMI and ASCAP.  Explains Matthew:

"It details the events that led up to the great radio boycott of 1941 and how that event impacted the development of American popular music for the rest of the century. It dives into the history of the 1909 Copyright Act and the resulting Herbert v Shanley Co. Supreme Court case. It also makes clear what the differences between ASCAP and BMI are". 

Fellow copyright enthusiast and 1709 founder-blogger Amanda Harcourt kindly listened to the podcast and has written the following review:

Bills, bars and Bourget 

If I had a pound (even a Euro) for every time I have told students the story of the French composer (Ernest Bourget) arguing with the patron of the café concert Ambassadeurs over his bill (as opposed to his public performance fees) and the consequent founding of collective management organisation SACEM, I wouldn’t need to work. It was fun to learn that ASCAP’s foundation was similarly triggered by a row in a bar. What is it with songwriters and composers? Spending inordinate amounts of time in bars seems to be a sine qua non for creation.

Sidebar: In the mid-1990s, the USA came full circle in this respect – restaurants and bars got their own back with the passing of the US act exempting certain shops, bars and restaurants from paying public performance fees.

There are similarities. Bourget’s music was being performed at the Paris Opera Comique when the row erupted over the bill. In parallel, , shortly after the founding of ASCAP, the American composer, Victor Herbert challenged the use of his song “Sweetheart” in the fashionable Times Square restaurant Shanleys (where Herbert was dining with Puccini). Composers should thank famed jurist Oliver Wendell Holmes who delivered the majority opinion (he did not recuse himself , which maybe, as his father made a living from copyright, he should have done). The right to be paid for public performance of a copyright work, was set, in circumstances where those supplying the music did so for profit – a condition that became a key plank in challenges to ASCAP’s desire for fees.

The podcast coverage of the 1909 Copyright Act is brief but Sharkey, a performing seal, takes centre stage in the story.

The rise of radio in the US led to case after case being brought by ASCAP, as stations sought to demonstrate they were not using music “for profit”. They also argued they were not broadcasting “music” but that “particles of the air” were being stimulated! They argued they were a “public service” and that they were helping citizens ease their “pain” by distracting them. Fortunately, we have yet to see a variation of those arguments coming from today’s streaming services. ASCAP won in lower courts and the US Supreme Court supported the lower court’s decision. Licence fees were negotiated and, reluctantly, paid by the radio stations. As the profits from radio grew, so ASCAP got bolder and at the end of the 1930s sought to double their radio licence fees.

The broadcasters looked for a way to challenge what they saw as an abuse of ASCAP’S monopoly power and found what they believed to be the society’s Achilles Heel. ASCAP membership was not open to all – the society had rules about a potential members catalogue size, value and even, whether the works were recent. Most members were white males who wrote Broadway successes or music for Hollywood. They were “skimming the cream” and there were scores (no pun intended) of US songwriters who could not collect.

BMI is born 

In 1939, at the radio industry’s annual meeting ,the broadcasters founded a new collective management organisation, Broadcast Music Inc or BMI. In what proved to be a key move for the future of music, BMI signed writers of roots music, blues, country, jazz and the aspiring writers ruled too young and unproven to belong to the ASCAP “club”.

Confident in the quality of their repertoire and sure of their hold on the public’s taste, in 1940 ASCAP put the broadcasters on notice that, if they refused the increased licence fee, they would not be permitted to broadcast the ASCAP catalogue past the end of the year. One radio station in Montana brought felony extortion charges against the President of ASCAP, and he was arrested and jailed in Arizona – though the charges were not pursued.

As the year and the argument dragged on, fewer and fewer ASCAP songs were being broadcast and by December 1940 radio bandleaders were instructed to stop playing music in the ASCAP catalogue. At midnight on December 31st 1940 the ASCAP licences expired.

To the astonishment of ASCAP the public were not as upset as ASCAP expected, the new music captured the public’s heart and revenues from the ASCAP songs plummeted . This was a row that, with a PhD in hindsight, by briefly changing the landscape of American music being broadcast, may have fundamentally influenced the country’s public taste and the longer term strength and popularity of the genres added to the BMI repertoire. Maybe even the birth of rock and roll with this change in America’s “collective musical ear”.

Enter the seal.

An animal trainer, who had lost all but two of his performing seals in a devastating fire, opened a nightclub in Kingston, New York state. But by the time of the radio boycott he was determined to re-establish himself in the work he loved and built a large seal training facility – a Seal College. The scout for talented “pupils” began and Sharkey was discovered. He was an intelligent pinniped, was trained and learned to play a homemade instrument. Guided by a conductor, Sharkey pressed levers to create the musical notes and “Where the River Shannon Flows” became his standout performance. It was an ASCAP tune. On a national tour in 1941 Sharkey was booked to perform on a radio station in New Orleans. On March 5th, with the boycott still in place, the station contacted the ASCAP lawyers asking for an exception. They refused and the press, instead of the crowd, went wild.

The public outcry that had failed to materialise with the boycott now kicked in over Sharkey the seal and his heartless Louisiana legal ban. The radio boycott endured for 10 months and by November 1st 1941 a new ASCAP national radio rate was agreed, nearly identical to that which had applied before the radios went silent on ASCAP’s repertoire. But it was 1949 before Sharkey was completely exonerated. Sharkey finally got his chance to perform on the networked Ed Sullivan Show, juggling, playing Frisbee and…..performing “Where the River Shannon Flows”.

The podcast goes on to explore the flawed membership policies of both societies in a fast changing music landscape. It highlights the link between broadcasters, record labels and the BMI repertoire and ASCAP’S misguided attempts to clip BMI’s wings on anti-trust and collusion grounds. BMI embraced African Americans as members but the integration was limited – publishers would be signed up but often it was left to the publishers’ discretion about whether the songwriters were sharing revenues. ASCAP was slow to recognise the “new” music until the 1960s when new leadership led to a change in policy that ultimately meant that ASCAP and BMI became equivalent – so-called “parity products” – save for the Board composition at the two societies.

You can listen to the podcast yourself by following this link.

The CopyKat may not be able to look at the Queen - but the Kat can look at royalties

So - streaming is the future of the music industry is it? Well, hot on the heels of Apple's itune's announcing a 14% drop in revenues from global download sales in the first half of 2014 and the continuing and decade long year on year decline in CD sales - it may well be. A recent survey [1] said that Dutch music fans spend just half of what they spent in 2003 on recorded music - but they spend more than twice as much on live music as on recorded music. That sai, the study by streaming service Spotify this year said that in 2013 and for the first time in 13 years there was a slight increase in revenues from recorded music, and figures from the record label's trade body the IFPI supported this position with 39% of global recorded music revenues now from digital channels and 7% from performance rijghts. So - things are on the up - yes? Well  maybe - but, and its a big but - who gets what from the share of the streaming pie is big news indeed at the moment with artists, composers, record labels, music publishers, collection societies and the operators and investors for both subscription and so called freemium (ad funded) platforms all looking for their share of that pie. So, with that in mind, this weekend the CopyKat is all about royalties and who gets what -with a selection of recent posts from around the globe.

Irving Azoff

First off - the big stars flex their muscles. Some 20,000 works composed by popular musicians including The Eagles, Pharrell Williams, Boston, Foreigner, John Lennon, Smokey Robinson, Chris Cornell, and George and Ira Gershwin could soon be removed from YouTube - just as the Google streaming giant launches it's YouTube Music Key, it's much-anticipated music subscription service that will compete with Spotify and Pandora. Why? Well band manager, ex Live Nation chief and now boss of  Global Music Rights (GMR) Irving Azoff (right) has told The Hollywood Reporter that he is prepared to take 42 of his clients away from YouTube. Azoff had already fired a shot accross the bows of the two big US music collection societies BMI and ASCAP saying "The way fans listen to music is evolving daily" adding "GMR is going to give songwriters and publishers an opportunity to engage in meaningful licensing for their intellectual property. The trampling of writers' rights in the digital marketplace without any regard to their contribution to the creative process will no longer be tolerated."

Azoff's announcement followed hot on the heels of the news that Taylor Swift and her record label Big Machine had  pulled her entire catalogue from 'freemium' streaming services - most noticably Spotify and Deezer. Swift's view seems to be this: why let eager fans have something for nothing - when they would happily buy her album in physical form or as a download? And indeed in the first week of Swift's Spotify free album release her album 1989 sold 1.287 million copies in the US, debuting at No 1 in the Billboard 200 albums chart.  "If this fan went and purchased the record, CD, iTunes, wherever, and then their friends go, 'Why did you pay for it? It's free on Spotify', we're being completely disrespectful to that superfan who wants to invest", said Big Machine's Scott Borchetta.

Indeed the the recorded music industry may be gearing up to cut down on free music. The Wall Street Journal reported that many of Universal Music’s current licensing deals with streaming partners are expiring at the end of this year, and UMG boss Lucian Grainge recently said “ad-funded is not a sustainable business model”. The WSJ says Universal "planned to experiment with price and membership terms, possibly offering subscribers everything from interaction with artists to access to live events" with Grainge saying "But the third phase" is “going to be accelerating paid subscription and experimentation ....  with an enormous, high-margin, regular, recurring prize at the end of it.” Is that right? Ek thinks freemiu drives subscription and - no freemium - do the piracy rates start to soar again?

Next the British Academy of Songwriters, Composers and Authors has extended the debate by pointing to the relative inequality in payments from streaming made to songwriters when comparied to recording artists and labels. Gary Osborne, who chairs BASCA's Ivor Novello Awards, said this of streaming royalties: "No matter how bad it is for the [recording] artists it's a whole lot worse for the writers! People don't understand the difference between the writer and the act, but artists receive a far higher income from streaming than the people who write the songs. This is because deals were done first with the record labels that represent the artists, after which a few scraps seem to have been tossed to the songwriters and their publishers as an afterthought". BASCA Chairman Simon Darlow added: "The Fair Trade Music study just published by North American and Canadian composer organisations reveals that the label/ publisher split is, on average, around 95/5 in the label's favour - this cannot be justified". And BASCA's CEO Vick Bain added "BASCA totally supports the principle that authors should have control over the distribution of their music. The rates received by composers from the streaming services - especially YouTube - are so dismal that very few of the people who create the incredible songs that drive and support the music industry can make a decent living in the digital environment".

Foo Fighters

Ex Nirvana drummer and Foo Fighter's front man Dave Grohl added to the debate - sort of: when asked about streaming royaties and Swift's decision to pull her music - saying ""Me personally? I don't fucking care" adding "That's just me, because I'm playing two nights at Wembley next summer" and "I want people to hear our music, I don't care if you pay $1 or fucking $20 for it, just listen to the fucking song" and underpinned his economic model by saying "You want people to f**king listen to your music? Give them your music. And then go play a show. They like hearing your music? They'll go see a show. To me it's that simple, and I think it used to work that way" although he did temper his critique of Swift's stance by adding "But I can 
understand how other people would object to that".

And High Flying Birds and ex Oasis man Noel Gallagher managed to somehow get coffee into the royalties debate telling Noisey "It infuriates me that people are more willing to sit in a coffee shop and spend a tenner on two coffees, talking about the weather with their friends, and that coffee will last 45 minutes, yet they will physically get angry at you for asking them to buy an album for a tenner that will last a lifetime and might tell you about yourself and might even change your life. It's a strange moment we're in where people are willing to spend money on shit".

Back to the big debate: Spotify's Daniel Ek responded to Taylor Swift and other critics in a lengthy blog post reigniting the debate prompted by Swift pulling her recorded music catalogue from free (freemium) streaming services. Ek begins by saying "Taylor Swift is absolutely right" (referring to remarks the singer made in a Wall Street Journal  and Yahoo interview) adding "Music is art, art has real value, and artists deserve to be paid for it. We started Spotify because we love music and piracy was killing it. So all the talk swirling around lately about how Spotify is making money on the backs of artists upsets me big time". Ek then detailed how the Spotify payment model works and revealed that Spotify has now paid out $2 billion to the music industry since launching in 2008, $1 billion of that in the last year and that Spotify now has 50 million active users, 12.5 million of whom are paying subscribers - an increase of ten million and 2.5 million respectively since the last lot of official figures released back in May of this year. However Ek somewhat failed to address why a relatively small share of these streaming royalties are shared out to recording artists once the money has left Spotify's bank account, not least as the labels who seem to be keeping the lions share of streaming revenues are key partners in his business, both as content providers and shareholders. Ek added "The music industry is changing - and we're proud of our part in that change - but lots of problems that have plagued the industry since its inception continue to exist" ading "As I said, we've already paid more than $2 billion in royalties to the music industry and if that money is not flowing to the creative community in a timely and transparent way, that's a big problem. We will do anything we can to work with the industry to increase transparency, improve speed of payments, and give artists the opportunity to promote themselves and connect with fans - that's our responsibility as a leader in this industry; and it's the right thing to do". In December 2013, the company launched a new website, "Spotify for Artists", that revealed its business model and revenue data. Spotify pays “rights holders” royalties for all the music streamed on the application. The company pays 70% of their total revenue and retains 30%

Ek also points out that, while consumers can access music at this level for free, the artist does still earn a royalty from each play their music receives a stream and compared that  to terrestrial US radio station where labels and recording artists earn nothing for a play (although songwriter earns a royalty from American radio.). In other countries such as the UK both PPL (for labels and recording artists) and PRS (music publishers and songwriters) collect from radio stations. Undeterred Ek continues  "Here's the overwhelming, undeniable, inescapable bottom line: the vast majority of music listening is unpaid", noting that Spotify's main competitors are radio, YouTube and piracy. "If we want to drive people to pay for music, we have to compete with free to get their attention in the first place". Spotify's free tier is vital to driving people to pay, he continues, saying: "More than 80% of our subscribers started as free users. If you take away only one thing, it should be this: No free, no paid, no $2 billion" - not least with a 14% global decline in download sales so far in 2014." Spotify as has many paying subscribers as the other main streaming services pu together - Deezer has 5 million, Rhapsody/Napster 2 million and no figures published for Rdio or Beats in the US.

Thom Yorke 

According to a recent study by UK communications regulator Ofcom, the number of illegally downloaded tracks fell by around a third last year, dropping from 301 million in March 2012 to just 199 million in March 2013. This was attributed in part to the growth of legal music streaming services. But these streaming services have come under fire in recent months for paying relatively low royalty rates, compared to the royalties that musicians receive from traditional CD sales and legal downloads. In July 2013, Over a year before Swift's move, Radiohead and Atoms for Peace frontman Thom Yorke withdrew his independent work from Spotify, later describing the music streaming service as “the last desperate fart of a dying corpse”. In September 2011, US independent label Projekt Records entered a public disagreement with Spotify, stating "In the world I want to live in, I envision artists fairly compensated for their creations, because we (the audience) believe in the value of what artists create. The artist's passion, dedication and expression is respected and rewarded. Spotify is NOT a service that does this. Projekt will not be part of this unprincipled concept. In May 2012, British Theatre vocalist and Biffy Clyro touring guitarist Mike Vennart noted, "I'd sooner people stole my work than stream it from [Spotify]. They pay the artists virtually nothing. Literally pennies per month. Yet they make a killing. They've forced the sales way down in certain territories, which wouldn't be so bad if the bands actually got paid." Yorke's colleague, Radiohead producer Nigel Godrich, noting that both Universal and Sony were shareholders in Spotify, added "The big labels did secret deals with Spotify and the like in return for favourable royalty rates.The massive amount of catalogue being streamed guarantees that they get the big massive slice of the pie (that $500 million) and the smaller producers and labels get pittance for their comparitavely few streams. Back in 2009 Spotify's shareholders included Sony BMG 5,8%, Universal Music 4.8%, Warner Music 3,8%, EMI (now Universal) 1.9% and indie label body Merlin had 1%. With estimates of Spotify's value anything between $1 and $3 billion - that's a nice profit!

And finally the UK's Music Managers Forum followed this by issuing a statement saying that the organisation is a "big supporter of streaming services", and suggesting Taylor Swift and her label  are taking a short-sightedness for pulling her content from Spotify, although the MMF also hit out ar Non Disclosure Agreements that hide the deals between streaming services and the major labels. "Few markets are perfect and yes the 'low rate issue' has conflicted many, but above all, streaming services are a fabulous tool that connects artists and creators with fans", the statement reads. "No longer restricted by physical barriers, streaming gives a voice to those that want to be heard and a platform from which to build multi-revenue businesses that cross borders. There are no guarantees of success but the opportunity is there for all that want to give it a shot".  Finally, the statement concludes: "Non Disclosure Agreements hide how the major music corporations license streaming services and we have grave concerns that the deals contain stipulations that both significantly reduce the amount artists ultimately get attributed and damage the growth of the streaming economy. The real fight is more likely between opacity and transparency, and we call on all major music corporations to take note and react in the best interest of their artists and shareholders". Legendary record label boss Morris Levy reportedly more than told a leading recording artist "You say you want royalties. Then you should try Buckingham Palace" [2]. I don't hear many artists laughing. U2 frontman Bono told the Web Summit conference “The real enemy is not between digital downloads or streaming. The real enemy, the real fight, is between opacity and transparency. The music business has historically involved itself in quite considerable deceit,” [3]

There will be more to come as the jousting continues. Spotify is yet to make a profit as a global business: in 2011, when the music service made its US debut after years of popularity in Europe, Spotify brought in about $252 million in revenues, according to the New York Times. In 2012, revenues jumped to $576.5 million but losses  had grown from $60 million in 2011 to $77 million in 2012, largely due to increased licensing fees. And those licensing fees from Spotify drove a large part of the 75% jump Universal Music Group achieved in 2013 in subscription and streaming revenues to $618 million. Globally Spotify now has 50 million plus users, and Spotify’s UK business was profitable for the first time in 2013, Spotify Ltd’s revenues rose 41.8% from £92.6m in 2012 to £131.4m in 2013, helping the company’s UK arm to move from an £11m net loss in 2012 to a £2.6m net profit in 2013. “This growth can be attributed to a 42% year on year growth in UK subscriptions and also to an increase in advertising revenue,” a Spotify spokesperson told the Guardian. In 2013, Spotify Ltd’s cost of sales – which includes royalties paid to music labels and publishers – were £96.2m, accounting for 73.2% of its revenues. And that's just the UK - the service operates in North and South America, mainland Europe and Australasia - so we are looking at A LOT of money from a global streaming market from just this one player - explaining that $1 billion figure Ek had trumpeted. 


But who gets what from this growing pot has yet to be decided: there are numerous ongoing lawsuits between artist's and their record labels about their respective share of the digital pie - some settled, some not; clearly songwriters feel that recording artist and record labels are getting an unhealthy share of revenues; The collection societies face the threat of being pushed out by direct deals between the major labels and music publishers and services such as Pandora and Spotify - and squeezed by new entrants such as GMR; small labels and independent artists feels they are disadvataged because of the shareholdings held by the major labels in Spotify and 'secret deals' between streaming service and the labels; are the likes Spotify keeping too much of the pie anhyway? And what happens to the revenues from shareholdings in Spotify if it lists on a stock market? Questions, questions, questions! As streaming rapdidly moves into the audio-visual media with services such as Netflix and NOWTV rapidly gathering subscribers and new competition from both Google and Amazon - there will be more quesxtions, debate, arguements and no doubt failures and it will be fascinating to see how this all develops - until the next 'big' technology takes over!


[1] IQ Magazine Issue 56 Nov 2014 based on data from BUMA/NVPI/GfK Netherlands/Mojo Concerts 

[2] The Life and Crimes of the Music Biz  by Simon Napier-Bell Observer Music Magazine, January 2008

[3] http://www.theguardian.com/music/2014/nov/15/taylor-swift-music-spotify

Pie chart image by Jan Burch https://www.flickr.com/photos/53149458@N08/14124697651/

More on Spotify here http://en.wikipedia.org/wiki/Spotify

The CopyKat goes ape

In its submission to the US Department Of Justice's review of collective licensing in America, music collecting society BMI has said that it believes that music publishers should be allowed to choose which rights they allow it to administer.  It also says that BMI should be able to represent all rights in a musical work, including the mechanical right, not just the performing right, in order to create a "one-stop" licensing option and wats to see a new way for royalty rate disputes to be resolved. Just twenty four hours later the other big US song collection society ASCAP echoed those proposals, saying that allowing its members to pick and choose which specific performing rights it handed over to the collecting society to administer was "necessary to hold the system together". It also argued that being able to license mechanical as well as performing rights is "something that ASCAP's competitors are already free to do".

The BBC reports that the City of London Police's IP crime unit (PIPCU), which has been targetting web-block circumventing proxies, have now forced a number of these proxies offline and that one man has reportedly been arrested in connection with running a proxy server.

Sofie Gråbøl in The Killing

Sarah Lund, the star of the Scandanavian hot TV detective series The Killing, did an awful lot to promote chunky jumpers - the sweaters worn by actress Sofie Gråbøl became almost as famous as the cast of the Danish drama and Gråbøl admitted that her character had become dependent on her jumper and plans to scrap the woollen bound image were themselves scrapped by TV bosses. The show also prompted huge demand for the distinctive design - and now a lawsuit. The Faroese designers of Lund's original sweater, Gudrun & Gudrun, took legal action against Danish company Stof og Sy, which had made a considerably less expensive version of the "Lund" sweater - albeit one you had to knit yourself - retailing at 372 kroner (£40) rather than 2,887.50 kroner (£310) for a Gudrun sweater. But the claim for copyright infringement has failed - with a Horsens court in Denmark deciding that Stof og Sy can continue selling jumpers that resemble those from the acclaimed television series after Stof og Sy convinced the court that the star pattern used on the Lund jumper is an ancient and traditional Faroe Isles pattern - and the design of the jumper itself is based on the Faroese fisherman's sweater - both and hundreds of years old - so no violation of any copyright (or marketing laws) had taken place. More here and here. 

The Nigerian Copyright Commission (NCC) said it had seized pirated books, worth over N10 million, after a raid of markets and book shops, the Mile I Market and His Grace Bible House, Rumuowuta, all in Port Harcourt. The Commission disclosed that it has impounded 19 containers, suspected to be loaded with pirated books, at seaports and borders across the country. 

The U.S. Court of Appeals for the Sixth Circuit has confirmed that a party claiming infringement of copyrighted computer software must identify those components of the software that are protectable under copyright law before a jury can determine the substantial similarity of the defendant’s software.  Automated Solutions Corporation v. Paragon Data Systems, Inc., Case No. 12-3025; -3058 (6th Cir., June 25, 2014) (Cleland, J., sitting by designation). More here at the National Law Review website.

Re/Code reports that videogame streaming site Twitch's announcement that videos in its archives with unlicensed music will be flagged and partially muted has been met with some consternation and anger by users: Twitch has now admitted that it “screwed up” the announcement and has promised to add an “appeal” button for music that users think was flagged in error. But the actual act of cracking down on that unlicensed music, a seemingly necessary move to "avoid trouble from the litigious music industry", is here to stay.

Ronald Reagan: Official Portrait, 1981

Author Craig Shirely, an expert on former US president Ronald Reagan, is threatening to sue another author and biographer, Rick Perlstein, for copyright infringement for  his new Reagan book, The Invisible Bridge, seeking that the publisher of Perlstein's book pulp all copies, pay $25 million in damages, and take out adverts apologising to Shirley in The New York Times, The Washington Post, Newsweek, The Nation, The New Republic, Slate, and Salon. TechDirt suggests that Shiley's claim is rather unfounded saying "what he does have is the ability to point out where Perlstein relayed the same facts Shirley had previously recounted and a few minor sections which use Shirley's previous work as source material and paraphrase it. There are a couple of rather specific words retained in the paraphrasing, but that's about it, and most of those sections are recounting a setting or happening in history" adding "And it's not as though Perlstein is attempting to hide his use of Shirley's books as source material. The book-in-print directs those interested in the source material to Perlstein's website where he lists them out, including several of Shirley's books. He further credits Shirley's work in his source notes, talking about how useful it was. He further had reached out to Shirley to discuss some of his sources earlier.". Expect quills at dawn. 

Music Publisher EMI  has asked the Second Circuit to affirm it's victory in the battle with the heirs of songwriter John Frederick Coots over the ownership of the copyright in the song "Santa Claus Is Comin' to Town," asking the appellate court to confirm the lower court decision that company owns the song's rights until 2029. In a brief to the appeals court, EMI urged the Second Circuit to uphold U.S. District Judge Shira Scheindlin's ruling that Coots' heirs couldn't use the termination provisions under the Copyright Act of 1976 to regain the rights.

One of the disputed 'selfies'

Over on the IPKat Jeremy has posted a guest blog from Estelle Derclaye which re-examines the Case of the Black Macaque - the dispute between Wikipedia and British phorographer David Slater about some monkey business.- the snaps taken when the photographer's camera was stolen by a monkey (a crested black macaque) while he was on a trip to Indonesia in 2011 - and the monkey took a few shots of herself. Back in 2011 Aurelia J. Schultz posted an article on the 1709 Blog looking at this from the perspective of UK law and Indonesian law - as that is where the photo was taken - and the Daily Mail published the pictures here in the UK and online - and one of the thtee published 'selfies' had (C) Caters News Agency embedded in the shot with Mr Slater explaining "One of them must have accidentally knocked the camera and set it off because the sound caused a bit of a frenzy" and "At first there was a lot of grimacing with their teeth showing because it was probably the first time they had ever seen a reflection. They were quite mischievous jumping all over my equipment, and it looked like they were already posing for the camera when one hit the button. The sound got his attention and he kept pressing it". There is no mention of Slater amending the shot at that time although the three shots do look beautifully positioned and cropped in the Mail. Aurelia's opinion on the then known facts - "it appears under UK law, the photos are in the public domain. Under Indonesian law, the matter is less clear."  Slater is now looking to have the photos removed from Wikipedia: Wikipedia believes that although the photos were taken on the photographer's camera, he does not own the copyright because he did not take the photos. The Wikimedia Foundation spokeswoman, Katherine Maher, said that under US law no one owns the copyright and a message on its site states: "This file is in the public domain because as the work of a non-human animal, it has no human author in whom copyright is vested." Slater believes that Wikipedia's refusal to remove the article and a link to a free download of the images has negatively effected his livelihood and earnings. Estelle's view - "So is there copyright in the photograph? It seems

like this will be an evidential issue. If the photographer did indeed adjust the camera settings and the monkey stole the camera, then the monkey just pressed a button and is not the author, but the photographer is" and asks whether amendments such as cropping can "qualify the photograph as a derivative work made by the photographer?" concluding

 "The photographer may have a case -- and he actually wants a court to decide the issue." There were ten comments last time I looked - a couple of which are well worth a read. And with all this monkeying about, why not take a look at Eleonora's blog on the infamous 'Oscars' selfie - another copyright conundrum - but this one caused by actors rather than apes! And here's what hapens when you put a camera amongst a pride of lions ........ something that actors would NEVER do! And an interesting blog on this from Andrew Charlesworth, Reader in IT & Law at the University of Bristol, looking at both the concept of who can be a person and who might own the copyrights - and which jurisdiciton might apply here - and from an Australian perspective (what if a Koala took the selfie) see much more here.

That Oscars selfie and an automated snap of lions

And finally (and as you enjoy these various selfies) the CopyKat came accross a rather well written article about "common copyright myths related to fan fiction". The blog, A Fresh Look at Copyright and Fan Fiction by non lawyer Deb McAlister-Holland was actually an update of an earlier blog about fan ficiton and the author had been contacted by attorney Heidi Tandy who then helped McAlister-Holland through this tricky area - recently thrust into the public eye with Conan Doyle Estate's unsuccessful attempt to protect an expired copyright in many of the Sherlock Holmes stories and the characters of Holmes and Dr Watson. This new article is a good read and looks at transformative works under US law, The Supreme Court's decision in Campbell v. Acuff-Rose Music, the "Harry Potter Lexicon" case, and commercial and non-commercial uses in the USA in the context of fan fiction. If you have a burning urge to write the next sequel or prequel to Lord of the Rings, or deveop your own 'Harry Potter' characters or bring new tales of vampiric delight with your own Twlighight Saga you can find the original article here and the updated article here.

The CopyKat - Pirate Bay founder sails into an unsafe Swedish harbour

Peter Sunde , co-founder of file-sharing website The Pirate Bay, has been arrested in southern Sweden and is now expected to serve an outstanding sentence for copyright violations after being on the run for nearly two years. Sunde had been wanted by Interpol since 2012 after being sentenced in Sweden to one year in prison and fined for breaching copyright laws. "We have been looking for him since 2012," said Carolina Ekeus, spokeswoman at the Swedish National Police Board. "He was given eight months in jail [the sentence was reduced on appeal although the fines increased] so he has to serve his sentence." Sunde had been living in Berlin, Germany, but returned to Sweden at times due to having family there.His final appeal against his sentence failed when his request for another appeal was denied by Sweden’s Supreme Court.

In the U.S. the Department of Justice is conducting a review of the consent decrees governing the nation’s largest music performance rights organisations, which many see as a critical development amid the ongoing debate over copyright reform. ASCAP last had its consent decree, which governs how the collection society collects and distributes royalties, updated in 2001, while BMI’s has not been updated since the 1990s - and boy oh boy, has technology moved on since then! Both songwriters and publishing companies have suggested that the consent decrees need serious revision, with some even arguing they should be abolished - and ASCAP have already publicised some suggested changes. But the push for updates grew louder earlier this year when a federal rate court gave an unfavorable ruling to ASCAP in its royalty rate dispute with Pandora. Review of the consent decrees will trigger a 60-day public comment period, which is sure to draw in stakeholders ranging from songwriters and publishing companies, to broadcasters and record labels.

Colin Kaepernick

The arm tattoos on San Francisco 49ers quarterback Colin Kaepernick will be duplicated on his digital avatar in the next “Madden” video game: According to ESPN, Kaepernick secured copyright waivers from the two tattoo artists who inked the biblical psalms and other religious references and which were copied into the biceps of the virtual Kaepernic and so, and as the NFL Players Association suggests, he has their permission to include their work in the game. More here.

Just as Shakespeare could not copyright iambic pentameter, an architect can't claim clapboard siding on colonial houses as his intellectual property, the 2nd Circuit Appeals Court has ruled, saying "Shakespeare wrote his sonnets; Brahms composed his Hungarian dances; and plaintiff designed his colonial houses"  ...... "Because we must preserve these forms for future artists, neither iambic pentameter, nor European folk motifs, nor clapboard siding are copyrightable." in a case brought by architect  James Zalewski and his firm Draftics Ltd. against construction companies T.P. Builders and Cillis Builders, the court held that the similarities Zalewski spied between his designs and the defendants' buildings "are features of all colonial homes, or houses generally" and not protected.

The Beastie Boys have won $1.7m (£1m) in a copyright violation case against the Monster Energy Co who produce the energy drink.of the same name. The case was for copyright infringement and implied endorsement. Monster had used a montage of Beastie Boys tracks in a promotional video relating to a snowboarding event the brand sponsored, which was posted shortly after the passing of Beastie Boy Adam Yauch, who had included a clause in his will prohibiting his name, image or music being used in advertising or marketing materials. Monster conceded that it had used the music without permission, but said that it had done so by mistake, after one of its marketeers mistakenly inferred from Z-Trip, the DJ the company had worked with on the party in the promotional video, that the music had been cleared. The beverage maker had insisted it should owe no more than $125,000 (£74,000). The Beastie Boys had sought $2m (£1.1m) - and got most if it. 

China is considering raising penalties for copyright infringement, according to a draft amendment. The draft amendment to the Copyright Law will see miscreants face fines of five times their illegal gains, or up to 250,000 yuan when the exact sum cannot be established. Previously the figures were three times and 100,000 yuan. The draft document was published by the Legislative Affairs Office of China's State Council to solicit public opinion, (which must be submitted before July 5th). 

Pandora opens up a box of fun

Pandora, the American streaming music service, has issued legal proceedings in the USA on the basis that the rates currently being offered by ASCAP, the US collecting society are unfair, because they are not as favourable as those offered to traditional broadcasters like Clear Channel, which have recently moved into the online music space. Arguing that Clear Channel have an advantage as it can negotiate the royalties they pay for their online services at the same time as negotiating music publisher fees for their FM networks, via the Radio Music Licensing Committee, the move comes after direct negotiations had failed. 

However, in the world of sound recordings, the collection societies are fighting back with the news that SoundExchange, the non-profit organisation that represents record labels and recording musicians, has launched its opposition to the Internet Radio Fairness Act, highlighting a letter signed by 125 artists who oppose Pandora's plan to "cut artists' pay" when music is played over Internet radio. The open letter, which has over 40 Grammy winners' signatories and the backers includes Kiss, the Dead Kennedys, Missy Elliot, Pink Floyd, Megadeath, Robert Plant, Don Henley, Billy Joel, Maroon 5, Martha Reeves, David Sanborn, Ne-Yo, Common and Roger Waters, praises Pandora saying "We are big fans" - and celebrates the company's commercial success, but asks why Pandora, with massive growth in revenues and a successful IPO under its belt, is pushing Congress to "slash musicians" pay saying "That's not fair and that's not how partners work together" telling Pandora it's time to go back to the drawing board.

“We all want Internet radio to succeed, but it won't if it tries to do so on the backs of hard working musicians and singers," said MusicFIRST Executive Director Ted Kalo, and SoundExchange President Michael Huppe added "This issue is critical to the tens-of-thousands of recording artists we represent - all of whom rely on this digital performance revenue stream to make a living,". "It is important that we protect artists and the long-term value of their music, which is, after all, the foundation of Internet radio." 

Pandora claims the internet service has paid considerably more in performance royalties than satellite radio provider SiriusXM and the legislation is needed to level the playing field. 

The proposed law, the Internet Radio Fairness Act, (H.R. 6480/S 3609) was introduced in the US Senate by Oregon Democrat Ron Wyden. The House version has bi-partisan support and is backed by Republicans Jason Chaffetz (Utah) and Darrell Issa (California) and Democrats Jared Polis (Colorado) and Zoe Lofgren (also California) The legislators claim the Internet Radio Fairness Act would modernise the music copyright royalty system by setting a more equitable standard for the calculation of royalty rates for Internet radio. Interestingly, the EFF also support the legislation saying on their website that now the 2012 presidential campaign is over, “Congress may soon be able to get back to business. One of the things it should prioritize is fixing a longstanding tax on innovation that most folks don’t know about, but they should:the unfair legal treatment of Internet radio”.

So - a tax on innovation?  or a tax on musicians and the music industry? The debate seems set to run .......

https://www.eff.org/Internet-Radio-Fairness-Act-ExplanationA musicians perspective on Pandora

http://www.musicfirstcoalition.org/sites/default/files/Artist%20Letter.pdf 

http://www.examiner.com/article/music-industry-protests-pandora-and-internet-radio-fairness-act

Internet rights, rates (and wrongs)

I have always been suspicious that the only reason that songwriter and music publisher collection societies the Performing Right Society (PRS) and the Mechanical Copyright Collection Society (MCPS) in the UK ever evolved into 'PRS for Music' was because that at that time no-one quite knew what a stream or a download was in law and that the merger only way they could sensibly (and legitimately) explain their right(s) to collect royalties from the use of their member’s songs on the internet. There was (and still is) much debate about what constitutes a 'stream' and what constitutes a 'download' and whether these form a public performance (whether a broadcast or a 'communication to the public') or more like the sale of a copy of a copyrighted work - a 'per unit' sale. There again, some ask whether they both? Or are they the same thing? Or is copyright law so hopelessly out of tune with the modern world that none of these definitions are actually applicable? Well now a US Federal appeals court has had a go at casting some much needed light on these issues and indeed on how the US collection society should be levying royalties for the use of (here) collection society ASCAP (songwriter and music publisher) members' works.

Looking at royalty rates first, The US Second Circuit Court of Appeals has overturned a District Court's decision that applied collection society ASCAP's streaming music royalty to Yahoo and RealNetworks’s activities and ordered a lower court to re-examine its findings. The Court of Appeals said that "in setting the royalty rate, the District Court must follow an approach more tailored to the varying nature and scope of Yahoo's music use" saying that "The district court did not adequately support the reasonableness of the 2.5% royalty rate applied to the value of the Internet companies' music use". The lower court was also ordered to "conduct a more complete analysis of the various uses of ASCAP's musical works by RealNetworks."

Judge John M. Walker, Chief Judge Dennis Jacobs and Judge Debra Ann Livingston said that the lower ("Rate") court’s establishment of benchmarks using the rates cable companies and broadcast stations pay for licensing music was inappropriate because the nature and scope of the online companies’ use of music differed significantly. The judges sided with Yahoo! and criticised the Rate court for relying on inconsistent sets of data sources when coming up with its music licensing formulae and said that the rate court’s attempt to come up with a simple 2.5% across-the-board license for the two online services was imprecise -and did not take into account the different kinds of services that both Yahoo! and RealNetworks offer. The three-judge panel also found that the Rate court did not give enough of a rationale for basing its licensing fee formula on the amount of time a piece of music is streamed, rather than on page views, which is the primary driver of advertising revenue. The appellate court also found that Yahoo can’t be compared to television stations because its business isn’t as reliant on music as the television industry with Judge Walker, giving the opinion of the Court, saying "Nearly every program on a television station somehow utilizes musical works,” adding “In contrast, only a fraction of the traffic on Yahoo!’s web site uses music — much of Yahoo!’s web site does not implicate any music whatsoever. Given that Yahoo!’s revenue base relies far less on ASCAP content than the television networks’ revenue base, we believe that comparing percentages of overall revenue bases is of little probative value in this benchmark analysis.” The judge also pointed to Yahoo!’s more specific licensing terms with BMI in the USA for the different kinds of uses of music as an example of how licensing agreements can be more reflective of the nature of the use of the music and noted that ASCAP’s own agreements with Turner Broadcasting for its various cable stations also accommodate different kinds of licenses depending on how each station uses music.

The appellate court did agree with the lower court on one separate, but key issue that ASCAP had appealed. The Court rejected the notion that a music download constitutes a "public performance" of a song. The Court held that downloads do not constitute a public performance of a work as defined under current US copyright law. The court said "In answering the question of whether a download is a public performance, we turn to Section 101 of the Copyright Act, which states that '[t]o ‘perform’ a work means to recite, render, play, dance, or act it, either directly or by means of any device or process'," ruling that "A download plainly is neither a 'dance' nor an 'act'. Thus, we must determine whether a download of a musical work falls within the meaning of the terms 'recite,' 'render,' or 'play'." Judge Walker then went on to say that the court would look at he ordinary sense of the words 'recite,' 'render,' and 'play' which refer to actions that can be perceived contemporaneously saying "Itzakh Perlman gives a 'recital' of Beethoven’s Violin Concerto in D Major when he performs it aloud before an audience .... Jimmy Hendrix memorably (or not, depending on one’s sensibility) offered a 'rendition' of the Star-Spangled Banner at Woodstock when he performed it aloud in 1969. Yo-Yo Ma 'plays' the Cello Suite No. 1 when he draws the bow across his cello strings to audibly reproduce the notes that Bach inscribed. Music is neither recited, rendered, nor played when a recording (electronic or otherwise) is simply delivered to a potential listener."

The court held that "The downloads at issue in this appeal are not musical performances that are contemporaneously perceived by the listener .... They are simply transfers of electronic files containing digital copies from an on-line server to a local hard drive. The downloaded songs are not performed in any perceptible manner during the transfers; the user must take some further action to play the songs after they are downloaded."The ruling also made a clear distinction with the streaming of files which, like broadcasts, had to be licensed for their performance saying "[Yahoo! and Real's] stream transmissions, which all parties agree constitute public performances, illustrate why a download is not a public performance. A stream is an electronic transmission that renders the musical work audible as it is received by the client-computer’s temporary memory. This transmission, like a television or radio broadcast, is a performance because there is a playing of the song that is perceived simultaneously with the transmission".

The Court sent the case back to the lower court to reconsider the method of calculating the licence fees due to ASCAP.


http://www.dmwmedia.com/news/2010/09/28/appeals-court-music-downloads-not-039public-performances039

http://broadbandbreakfast.com/2010/09/ascap-music-licensing-fees-voided-for-yahoo-realnetworks/

http://www.out-law.com/page-11406