Tuesday 6 November 2012

Music licences and the nemo dat rule: trouble for DMX?

Readers of this weblog will no doubt recall the fairly vigorous exchange of views between Lofty Larynx and Moode Media CEO Lorne Abony (here, here and here) over the alleged vices and virtues of Mood Media's US background music service subsidiary DMX.  Some of us had wondered whether this brief flurry of correspondence was ever likely to flare up again. Well, it seems that it has.  The 1709 Blog received earlier today the following missive from Lofty Larynx:
"Hey DMX: Habing Trouble Finding Dat Nemo?

Nemo dat quod non habet
Earlier in the year, readers may recall, there was discussion about the public performance licences which US background music service DMX (a subsidiary of Mood Media) had managed to acquire from some 800 US-based music publishers, bypassing the collecting society system. DMX was swift to try to counter the assertion that they had no right to perform the music catalogues of any writers who were direct members of a performing right society outside the USA.

Regular readers may also recall the distinction at issue: namely, while ex-USA writer members make a personal, exclusive assignment of their rights to their local performing right society and the US publisher thus has no rights in the USA, US writers assign their performing right non-exclusively to their societies -- which enables US publishers to issue direct licences to users in some circumstances.

DMX had assumed, rather like US foreign policy, that what prevailed in the "good ole US of A" applied everywhere else in the world. Sadly, this is not the case.

There has been an outcry from writers across the world (and from some equally cross lawyers and managers), supported vocally and emphatically by their US colleagues, and echoed by concerned publishers – all of whom saw their income plummet as a result of these hasty and ill-considered DMX deals. Why is this? Because the effect of these licences has been to reduce the value of the US background music performing right by 70%. Rich[er] in hope, these writers need not curse their fate as their “bootless cries” have been heard. The transactions have been scrutinised by lawyers with access to all the right sort of documents and precedents (on both sides of the Atlantic). And now ...

An important and active major music publisher has acknowledged to two performing right societies (one in the US and one in the UK) that it (the publisher) does not control the performing right in any works written by direct members of societies outside the USA. The DMX licences did not include, for example, the British catalogue. That’s right – the US rights remain within the society system for all ex-US writers.

The less dominant US publishers should follow suit and admit the sad (for them) truth that they have purported to issue licences to DMX for their entire catalogues when in fact they do not control the US rights to works emanating from the writing community outside the USA.

Or, to put it another way, the direct licences issued to DMX by US publishers excluded all works from the British catalogue, (and by extension excluded the French catalogue, Spanish, Canadian, German, Italian, Australian). So DMX should not be allowing any of their music locations to play any Beatles or Stones, Adele, Amy Winehouse, Guy Chambers, Led Zeppelin, Tiny Tempeh, Elton John, Coldplay, INXS, John Taverner, Sir Peter Maxwell Davis, George Fenton etc etc ...

It might have looked like a good idea at the time, but, as consumer rights groups often advise the unwary, if it looks to good to be true, it probably is.

Lofty Larynx has said “[he] begins to be sympathetic to [DMX’s] position – playing some music that they were assured was granted under a valid licence. One hopes [DMX] will "discuss" their difficulties with their purported licensors.” Well, Mr Abony, it might just be time to pick up that telephone.

After all, as only a complete idiot potential licensee would have concluded a licence with a US publisher without ensuring that publisher gave the usual warranties as to title, one can infer that those DMX licences contain undertakings to DMX that each publisher was granting valid rights – when in fact this was not the case.

Lifting the lid on the small print has come at an interesting time.

Pandora's box
Bloomberg tells us that poor old US music service Pandora is trying to reduce its royalty liability and has issued proceedings against ASCAP “because some large music publishers have announced they are withdrawing new media rights from ASCAP and negotiating licensing fees directly with Web radio services”. Well, good luck with that effort, Pandora! For the all-giving radio goddess may risk too much if she assumes she can take non-US writers’ works as well. She and competitors like Apple Radio would be well-advised to swing by the offices of the performing rights organisations in the USA if they want to acquire rights to play any music written by anyone other than an American!".

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