Songwriters and music publishers furious with Spotify over US rate appeal

US publishers and songwriters have hit out at an appeal made by the US streaming services, including Amazon and Spotify, who have  now formally objected to the new mechanical royalty rate set by the recent Copyright Royalty Board (CRB) ruling, with royalty rates for streaming and other mechanical uses set to rise 44% for the compulsory licences over the next five years. That decision was ratified last month (February 5th), when the CRB published the final rates and terms for songwriters. The top line revenue share figure to be paid by streaming services will rise, over a number of years, from 10.5% to 15.1%. 

The streaming companies were given 30 days to lodge official opposition to the ruling if they wished: Apple Music declined, but Spotify and Amazon, have now both filed a notice of appeal. Pandora and Google have also asked the CRB to review its decision. In a statement yesterday the National Music Publishers Association (NMPA) said that a “huge victory for songwriters is now in jeopardy” due to the streaming services’ filings. The NMPA called the appeal a “shameful” move which equates to “suing songwriters”.

Amazon, Spotify and Pandora issued a joint statement saying: "The Copyright Royalty Board, in a split decision, recently issued the US mechanical statutory rates in a manner that raises serious procedural and substantive concerns. If left to stand, the CRB's decision harms both music licensees and copyright owners. Accordingly, we are asking the US Court Of Appeals for the DC Circuit to review the decision".

The CEO of the NMPA, David Israelite, said last month, when the CRB's decision was confirmed, that if any of the tech companies did appeal the CRB ruling it would "in effect declare war against songwriters". He added: "Apple has announced it will not appeal. The others won't say. We will know soon whether some digital companies want to be partners or want to attack the songwriters who make their businesses possible. Stay tuned".

With the appeal process now confirmed, Israelite criticised the tech companies, noting that whilst the whole industry had collaborated to ensure the passing of the Music Modernization Act in the US, but that any hope that this kind of collaboration would become the norm "was snuffed out today when Spotify and Amazon decided to sue songwriters in a shameful attempt to cut their payments by nearly one third".

He added: "The Copyright Royalty Board spent two years reading thousands of pages of briefs and hearing from dozens of witnesses while both sides spent tens of millions of dollars on attorneys arguing over the worth of songs to the giant technology companies who run streaming services. The CRB's final determination gave songwriters only their second meaningful rate increase in 110 years. Instead of accepting the CRB's decision which still values songs less than their fair market value, Spotify and Amazon have declared war on the songwriting community by appealing that decision".

"No amount of insincere and hollow public relations gestures, such as throwing parties or buying billboards of congratulations or naming songwriters 'geniuses' can hide the fact that these big tech bullies do not respect or value the songwriters who make their businesses possible" adding "We thank Apple Music for accepting the CRB decision and continuing its practice of being a friend to songwriters. While Spotify and Amazon surely hope this will play out in a quiet appellate courtroom, every songwriter and every fan of music should stand up and take notice. We will fight with every available resource to protect the CRB's decision".

In a blog post, Spotify again responded saying that it believes “songwriters deserve to be paid more”, but argued that there are “significant flaws” in the CRB’s new rate structure. MBW says that although Spotify’s language on these “flaws” is, in parts, a little vague, but saying “We are supportive of US effective rates rising to 15% between now and 2022 provided they cover the right scope of publishing rights. But the CRB’s 15% rate doesn’t account for all these rights. For example, it doesn’t consider the cost of rights for videos and lyrics.” Israelite rubbished that suggestion too when contacted by MBW. He stated: “Wow. I didn’t think Spotify could sink much lower – but they have. This statement is one giant lie. I’m sure a PR team spent a great deal of time and energy crafting a statement to try to deceive artists and songwriters. They must think artists and songwriters are stupid. They are not.”

Elsewhere, Spotify's spat with Warner/Chappell in India continues, with Spotify insisting it can rely on compulsory licences provided for by Indian copyright law. Earlier this week the International Confederation Of Music Publishers said it supported the Warner publishing company in fighting Spotify's claim that where direct deals are not possible it can utilise a compulsory licence when streaming songs in India.

And whilst we are on Spotify, in Europe the streaming company has announced that it is filing a competition (anti-trust) complaint against Apple with the European Commission, regarding the latter's somewhat controversial 'app tax'. Apple currently charges any third-party app developer a 30% commission on all sales made through the Apple App Store – including music streaming subscriptions. Spotify co-founder and CEO Daniel Ek  posted a blog saying: "In recent years, Apple has introduced rules to the App Store that purposely limit choice and stifle innovation at the expense of the user experience – essentially acting as both a player and referee to deliberately disadvantage other app developers. After trying unsuccessfully to resolve the issues directly with Apple, we’re now requesting that the EC take action to ensure fair competition" adding "Apple requires that Spotify and other digital services pay a 30% tax on purchases made through Apple’s payment system, including upgrading from our Free to our Premium service. If we pay this tax, it would force us to artificially inflate the price of our Premium membership well above the price of Apple Music. And to keep our price competitive for our customers, that isn’t something we can do.

Apple have now responded.

https://www.adweek.com/digital/spotify-amazon-google-and-pandora-appeal-44-hike-in-music-streaming-royalties/

https://www.musicbusinessworldwide.com/spotify-accused-of-giant-lie-as-it-defends-attempt-to-block-songwriter-pay-rise-in-the-us/

https://musically.com/2019/03/13/spotify-complaint-european-commission-apple/

https://www.musicbusinessworldwide.com/spotify-backed-by-rival-music-streaming-platforms-in-apple-app-tax-row/

https://www.musicbusinessworldwide.com/apple-blasts-spotify-for-suing-music-creators-as-it-defends-app-tax/

The CopyKat - transformed, trans-Pacific, topped up but not transferred

The National Music Publishers Association (NMPA) has filed a copyright infringement suit in the US against Fullscreen Inc., a Multi-Channel Network (MCN) operating on YouTube and largely comprised of independent artists playing cover songs - allegedly without proper licensing or paying royalties although Fullscreen also services over 10,000 YouTube channels, including those owned by NBCUniversal, Nintendo, and Lexus. According to a statement from the NMPA they are alleging that Fullscreen "directly profits from advertising revenue generated by unlicensed music videos on their channels, but does not compensate songwriters or publishers." YouTube's own 'blanket' licences seemingly do not extend to  the growing number of Multi-Channel Networks.

Transformative art and fair use are quite the hot dinner party topic now if recent US court decisions are anything to go by. Hot on the heels of a case looking at the transformation of photographs of Rastafarians. comes a new decision that will cheer all American Idiots.

Seltzer's Scream Icon

Green Day's video

The US 9th Circuit court of appeals has ruled that US punk band Green Day did not infringe copyright when they used an artist's drawing of a screaming face in a video backdrop. Referencing Cariou v Prince, the other recent case on transformative art  (for more, see Jeremy's blog here), the court ruled that the band had transformed the work of Los Angeles-based artist and illustrator Derek Seltzer and were protected by the doctrine of fair use. Seltzer launched his action in 2010, saying the band had used his drawing "Scream Icon” without permission: a poster of the image had been photographed  by Green Day’s set designer Richard Staub on a wall on Sunset Boulevard in 2008 and later incorporated image into a four-minute video backdrop for Green Day's song "East Jesus Nowhere", a song about religious hypocrisy but the court said the fact the image was altered by a red spray-painted cross meant the image had been sufficiently transformed to become fair use.  At trial, Judge Philip Gutierrez granted summary judgment for the band and also legal fees of $200,000 seemingly unimpressed with Seltzer's claim: whilst the ruling was upheld, the award of legal fees was overturned as the appellate court, with Judge Diarmuid O'Scannlain for the court saying he found the decision "close and difficult".

I wondered if I blogged from now on in unusual shapes (my attempt at shapes above) the CopyKat could also fall under 'fair use' even when disgracefully copying other's efforts. Well, a slightly daft idea - but why not voice your opinion in our poll on the sidebar where the 1709 and the IPKat blogs are asking "Do you think that the US fair use defence really makes a difference in terms of user freedoms?".

Michael Geist blogs that the "U.S. Copyright Lobby Takes Aim at Canadian Copyright Term Through Trans-Pacific Partnership" saying that the U.S. copyright lobby, led by the International Intellectual Property Alliance, "appeared last week before a U.S. Congressional Committee hearing on the Trans-Pacific Partnership and made it clear that it wants the U.S. to use the trade agreement to force Canada to extend the term of copyright.  Canadian copyright law is currently at life of the author plus 50 years, which meets the international standard found in the Berne Convention. The U.S. extended its copyright term years ago to life of the author plus 70 years under pressure from the Disney Corporation (Mickey Mouse was headed to the public domain) and has since pushed other countries to do the same". More from Professor Geist on this here.

Despite a $10 million copyright and trademark suit, a new movie about the early life of the Deep Throat actress Linda Lovelace will hit movie theatres. Arrow Productions claims that The Weinstien Company distributed Lovelace uses 5 minutes of uncleared footage from from their Deep Throat film and benefits from the use of the name 'Linda Lovelace' which it has trademarked.  US District Judge Thomas Griesa rejected Arrow's request for a temporary injunction to stop the August 9th release, but the defendants, The Weinstein Company, Radius, Millennium Films, Nu Image, Inc., Animus Films, Untitled Entertainment, Inc., Eclectic Pictures, Inc., Avi Lerner and Laura Rister, still face a $10 million damages claim from the copyright owners. Amanda Seyfried stars in the new biopic and on the news that the injunction was nor granted the film's producers said that they "couldn’t be more pleased the world will finally get a chance to see Linda’s real story unfold on screen in Lovelace. Never again will she be silenced by the producers and distributors of Deep Throat”.

puuuuuurfect

Russia's new anti-piracy legislation, launched to combat 'high value' online piracy of movies and TV shows, is being amended to include music, photos and other images as well as text-based material. The Ministry of Culture says it will now begin changing the legislation.
and as well as including a wider range of creative content, the amendments will mean that site owners will be required by law to display their 'real-world' addresses alongside their email addresses on their websites in order to speed up correspondence and a streamlined system for complaints - or face being blocked.

Don't forget to vote!

The British Copyright Council has appointed a new Independent Code Reviewer. Walter Merricks CBE, formerly the Chief Financial Ombudsman, was appointed by a selection panel chosen to represent the interests of both rights holders and copyright users. Mr Merricks will conduct a review of the BCC's 'Principles of Collective Management Organisations' Codes of Conduct' following the first full year of implementation, to ensure that it remains fit for purpose. The BCC developed its Principles policy document to establish a framework of good practice for Collective Management Organisations (CMOs) and a set of minimum terms to be used as the basis for CMOs individual Codes of Conduct. Fourteen CMOs have now adopted these guidelines. The review will also reference the Government's October 2012 benchmark recommendations 'Minimum Standards for UK Collecting Societies'. Founded in 1965 and incorporated in 2007, the British Copyright Council is a not-for-profit organisation that provides a forum for discussion of copyright law and related issues at UK, European and International levels. 

RT reports that the Swedish Pirate Party has celebrated the 10th anniversary of the Pirate Bay torrent website by reporting the country’s publicly anti-piracy IT minister, Anna-Karin Hatt, to the Swedish Police for infringing copyright on several occasions. The party has been following Hatt’s account on Instagram, where it alleges that the politician is anything but innocent when it comes to respecting the legislation which she claims to so strongly support: It seems Karin-Hatt posted copyrighted Calvin and Hobbes cartoons as well as artwork for several movies, including The Lord of the Rings, The Da Vinci Code, and Monty Python and the Holy Grail - well that's according to a blog by the Pirate Party’s legislative spokesman, Torbjörn Wester.

The Hulk, Thor, Captain America and Iron Man

And finally, the 2nd U.S. Circuit Court of Appeals has upheld the decision by District Judge Colleen McMahon who in July 2011 ruled for Marvel in a dispute with the heirs of comic book artist Jack Kirby, finding artwork and characters he had drawn constituted works for hire under the Copyright Act of 1909.and that the family have no rights to characters such as the Hulk and Fantastic Four. These are owned by Marvel Entertainment, a Walt Disney Co subsidiary. Walt Disney bought Marvel for $4 billion in 2009. "Iron Man 3," the latest Marvel movie based on a character Kirby helped create, has grossed $1.2 billion worldwide. Kirby's other creations include Thor and Captain America (Marvel Characters, Inc. v. Kirby, 2nd U.S. Circuit Court of Appeals, No. 11-3333).

US publishers want payment from VEVO

the Beastie Boys iconic 'Sabotage' promo

David Israelite, CEO of US's National Music Publishers Association (NMPA), has called for a number of changes to the way the US music publishing business runs, both in the way publishers licence digital rights, and in the way American copyright law applies to digital licensing and the way collecting organisations operate. In particular the NMPA boss was critical of American record labels who are utilising contract clauses to avoid giving publishers their share when they are paid by online video sites, in particular VEVO, which includes major labels Sony and UMG amongst shareholders. 

In February we blogged about comments from indie publisher Matt Pincus, who had said his company was receiving no income from the booming music video service, because in the US VEVO had deals with the record companies (including Sony and UMG) that put the obligation to pay publishing royalties onto the labels, rather than paying royalties direct to the publishers - and the labels used contract clauses relating to promotional videos to say that the payment of song writing royalties could be avoided. An unhappy Israelite took this a stage further saying  "Today you have VEVO talking about reaching $150 million in revenue and wanting to grow to $1 billion, and a large amount of the music videos being played are not getting licensed [by our members] and publishers are not being paid. NMPA is going to put an end to that".

Billboard here 

More freshly-squeezed Lime

In a fresh blow, peer-to-peer file-sharing service LimeWire has been sued for copyright infringement by eight member companies from the National Music Publishers Association (NMPA) headed up by EMI and Universal. The lawsuit is similar to the thus far successful suit filed by the Recording Industry Association of America (RIAA) against LimeWire and its executives, seeking damages and injunctive relief and is also filed in the Manhatten federal court. A trial is scheduled for January and the NMPA said in a statement “The songs that make their illegal venture lucrative don’t appear out of thin air .... Behind every song is a vast network of people - a songwriter, a publisher, a performer, a record label. They have robbed every individual in that chain.”

Limewire publicly remains convinced it can offer legitimate business models to the content owners in the music industry saying in a statement "We have had many promising meetings with labels, publishers, and artists alike about our new music service and a business model that will compensate the entire industry”.

EMI April Music Inc. v. Lime Wire LLC, 10-cv-04695, U.S. District Court, Southern District of New York (Manhattan).

http://www.dailytech.com/New+Suit+Against+Limewire+Could+Total+15+Times+Music+Industrys+Yearly+Income/article18769.htm

Music publishers settle over lyrics site

The USA’s National Music Publishers Association (NMPA) has said that it has successfully settled its copyright infringement suit brought by members Peermusic, Warner Chappell and Bug Music against Motive Force and Sean Colombo, operators of the unlicensed LyricWiki database of song lyrics. Under the terms, Motive Force and Mr. Colombo will be permanently enjoined from further using unlicensed song lyrics on websites or applications, and will "turn over funds associated with the exploitation of the unauthorized content" saying that all unlicensed content had now moved to a licensed lyric website. The NMPA says that it’s continuing with its action against the alleged unlicensed use of lyrics against LiveUniverse and owner Brad Greenspan, the co-founder of MySpace.

http://www.dmwmedia.com/news/2010/01/05/music-publishers-settle-suit-against-unlicensed-lyrics-site

Publishers launch action against lyric sites

The US National Music Publishers Association (NMPA) has filed copyright infringement lawsuits against two businesses which publish unlicensed lyrics through their websites. The lawsuits, headed up by Peermusic, Warner/Chappell and Bug Music, allege that LiveUniverse, Inc. and its owner Brad Greenspan, and Motive Force LLC and its owner Sean Colombo, engage in wilful copyright infringement. The suits, which were filed in filed in the Federal Courts of the Central District of California and Western District of Pennsylvania, seek equitable relief and damages for the defendants' unlicensed use of the lyrics on their websites and in conjunction with certain web applications. NMPA president David Israelite said

"These sites are profiting on the backs of songwriters. It is unfortunate that
copyright holders must so frequently divert energies to protect their rights to
license and distribute their works. However, the demand for music prompts a
seemingly endless stream of illegal business models".

He added:

"Music fans are the biggest losers when licensed businesses, like LyricFind,
Gracenote and TuneWiki can't survive and prosper because unlicensed, illegal
businesses are allowed to thumb their noses at the law …we are confident the
courts will conclude that, like Napster and Grokster before them, these sites
are simply freeloading off artists and fans."

http://www.billboard.biz/bbbiz/content_display/industry/e3ia76573c6f2d502a15e774f187baccc91