Category: Art

Can Streaming Ever Work for Songwriters?

Yesterday, David Lowery’s The Trichordist published an article by singer/songwriter Blake Morgan—one which the Huffington Post apparently refused to run.  In the piece, Morgan describes meeting with Spotify executives to whom he tried to explain that their product isn’t Spotify itself but is in fact music.  “And by the way,” Morgan said, “stop calling your subscribers ‘users.’ They’re not ‘users,’ they’re listeners––our listeners in fact. You’re the ‘user.’ You’re using our music to monetize our listeners for your profit.”  This apparently confused and frightened the Spotify exec, who became defensive with an arrogance familiar to anyone who follows the internet industry. “You don’t get it at all!” the guy declared before leaving in a huff.

The night before reading Blake’s story, I met with a group of musicians in New York, and one songwriter showed up with a stack of papers in his hand. These were notices of intent (NOI) filed by a single entity on behalf of all the major streaming platforms for the purpose of obtaining compulsory licenses for use of dozens of the writer’s compositions. Based on reporting by Chris Castle, I wrote for the union publication Allegro back in March about major platforms doing this—using their overwhelming computing power to mass-file NOI, exploiting a loophole in Sec. 115 of the copyright law, in order to essentially blanket license all compositions for streaming platforms.  This living example of the songwriter with physical notices in hand hit home for me.  The songwriter explained that if he goes to the notice-sender’s website and fills out all the forms, there might be as much as $50 in it for him as compensation for thousands of streams of his work across multiple platforms.

American songwriters are unique among copyright holders because they are the only creative artists subject to a combination of compulsory license (i.e. anyone can use their work if they pay the license fee) and a consent decree, with roots in the early 20th century, whereby a federal rate court determines what the license fees will be for various uses, including public performances.  And because the average rate for a digital public performance is $0.005, this is why millions of streams are worthless to songwriters, despite the fact that streaming has largely displaced their other sources of revenue.

With Spotify poised to announce an IPO this year and make Daniel Ek and his colleagues even wealthier than they already are, a New Year’s Eve lawsuit with a price tag of $1.6 billion was filed by Wixen Publishing against Spotify for its unlicensed use of  hundreds of songs, including famous writers like Neil Young, Tom Petty, Stevie Nicks, and Donald Fagen.  The complaint alleges that 21% of the 30 million tracks on the platform are being used without mechanical licenses, and this number seems reasonable given the available anecdotal evidence and the grounds for previous litigation.

In the Lowery/Ferrick class-action suit for this same failure to license, Spotify’s defense amounted to claiming an intent to pay the license fees but for the lack of an efficient means to locate the songwriters due the royalties.  That suit settled for a modest $43 million fund, amounting to just a few dollars per infringement. Then, in response to a pair of lawsuits filed in September last year, Spotify came very close in its initial motion to asserting that streaming services were not even subject to mechanical licenses.  This drew immediate fire from the music world, notably National Music Publishers Association CEO David Israelite who said that Spotify was asking for a fight with “all songwriters.”

Fast-forward to the end of 2017, and the event that triggered Wixen’s 11th-hour litigation was the release just before Christmas of a draft bill titled the Music Modernization Act.  Sponsored by Representatives Doug Collins (R-GA) and Hakeem Jeffries (D-NY), the bill reflects about 4-5 years of legislative work trying to secure the interests of music-makers in the streaming market—even if, as Blake Morgan describes, the bros at the streaming companies don’t understand that they’re in the music business.

The MMA is endorsed by multiple music rights organizations, including NMPA, ASCAP, BMI, SONA, RIAA, A2IM, and several others.  The proposed legislation addresses a number of issues have long divided musicians and streaming platforms by creating a new digital licensing collective that has been compared to SoundExchange by some observers.  But the reason the bill triggered the Wixen lawsuit is that, if passed this year—and this seems feasible—the law would foreclose any new lawsuits over mechanical licensing infringements (including past infringements) because its core agreement is predicated on a blanket, compulsory license in exchange for an improved system of royalty distribution.

Key improvements include a new database funded by the digital platforms that would, in principle, more accurately identify and locate songwriters and composers to receive; and a new rate-setting process that is expected to raise the overall rates paid to songwriters.  Nevertheless, as written to date, the bill contains three areas of concern for songwriters. These have been publicly noted by Rick Carnes, CEO of the Songwriters Guild of America, though my understanding is that other parties share some of these concerns, and they will be raised as amendments to the bill are proposed in coming weeks and months. The issues Carnes raises are the following:

First, the immediate end of all litigation for past infringements seems to unfairly limit the remedy options for independent and small-publisher rights holders.  Carnes says he fully understands the need for a safe harbor in exchange for collective licensing going forward, but “why are songwriters who have seen their works infringed hundreds of thousands of times in the past having their right to sue for damages cut off arbitrarily on January 1, 2018?”

Second, the board overseeing this new digital licensing collective would currently comprise eight publisher representatives to two independent songwriter representatives.  Carnes argues that representation should be 50/50 just like the board overseeing SoundExchange.

Third, as written, the bill calls for royalties collected and held for songwriters who cannot be located to be distributed on a market-share basis, mainly to the major publishers. Carnes says that it is naturally the independent and small publishers who are most likely to fall through the cracks in the new system, which he describes as “enshrining” a longstanding problem even in old systems whereby music creators are often not properly compensated through royalty-collection practices.

Meanwhile, despite Spotify’s prominent role in this narrative, the reality is that YouTube is the most-visited platform for music streaming, and that platform pays a songwriter about ten percent of what Spotify pays (think $24 for a million plays), when it pays at all.  Presumably, any number of tracks a listener will “discover” on YouTube will be unauthorized uploads by users and are, therefore, outside the system that compensates artists even the paltry tip-jar money they’re due.  I mention this by way of saying the market itself remains volatile and dynamic, and we should be no more surprised to see Spotify suffer a Pandora-like fall from grace than to see it retain its dominant position.

I am hopeful that issues raised by Rick Carnes can be addressed as the Music Modernization Act moves through the process so that thousands of songwriters, whose names you’ll never know, can begin to benefit from the future of the digital music marketplace—whatever that future may look like. The bill certainly represents the first significant legislative attempt to make streaming work for musicians, but it would be an unfortunate irony if the independent voices—the ones who first advocated the democratization of the internet—were the ultimate losers going forward.  And we, as listeners, would lose as well.  Meanwhile, kudos to independent voices like Blake Morgan just for reminding the tech geeks with so many dollar-signs in their heads that without the music, movies, TV shows, etc. nobody would give a damn about their bloody apps.

Image by TurboMotion

Digital-Age Copyright:  Photographs and the News

You might think that among the most straightforward relationships between a user and a creator of a copyrighted work would be that of a news organization and a photographer—namely that the news organization should license the photographs it uses for any of its stories.  It is also common-sensical that whenever a news organization displays a photograph in a manner that either disseminates news under its brand and/or promotes its brand, that the organization is deriving commercial benefit from its display of the photographer’s work.  As such, it should not matter—in fact the nature of the web demands that it must not matter—where the image is actually hosted.  Unfortunately, that’s not necessarily how the law works right now.

This article in Above the Law by attorney Scott Alan Burroughs alludes to a case that exemplifies how the current copyright law underserves creators in the digital age. At issue is a photograph of athlete Tom Brady, taken by photographer Justin Goldman in 2016, and used without permission, first by Breitbart News and then by ten other news organizations.  Goldman alleges infringement of his exclusive right to display his work and seeks relief in the form of damages and attorney fees from all eleven news organizations.

The EFF filed an amicus brief (10/5/17) on behalf of the defendants, asserting the precedent established by the 9th Circuit in Perfect 10 v. Amazon.com (a.k.a Perfect 10 v. Google) (2007), in which the plaintiff argued that Google violated the display right by making full-size images available via the Google Image Search tool. The court held that because these full-size images were hosted in various places around the web and not on Google’s servers, that Google was not in possession of “copies” according to the plain language of the law (Sec. 101) and could not, therefore, infringe the display right.

The decision in Perfect 10 provided a precedent known as the “server test,” and the EFF may be correct that it will be the standard applied in the Goldman case.  But it shouldn’t be because it represents an easy end-run around the public display right that effectively obliterates the right in cyberspace.  It is also important to note that linking to pages (what is sometimes called “deep-linking”) should not be viewed as infringing, but this kind of “in-line linking” whereby a site embeds code to cause an image to appear on its page while the image is hosted by another party’s server, is the problem. (Meanwhile, note that Playboy is suing BoingBoing for displaying centerfold images in exactly the same manner.)**

The Server Test Doesn’t Make Sense

To maintain the purpose of copyright with respect to the way the internet functions, the standard in a case like Goldman v. Breitbart et al should not turn on whose server hosts a copy of the photograph, but who takes action to display the photograph and for what purpose. This interpretation of the author’s right to display works would conform to any reasonable person’s understanding of the actual market experience.  “The argument [for the server test], in essence, is that for-profit sites should be able to publish whatever they want without the consent of the artist so long as the photograph or video is published via an embed. This argument has no merit, though, because the end result is exactly the same to the viewer, and the viewer is the basis for the site’s profits,” Burroughs writes.

The news corporations in this case are making use of Goldman’s photograph to generate interest in whatever story they want people to read and to promote their brands online. Clearly, they are leveraging the value created by the photographer, which is exactly what copyright is designed to protect.  As such, licensing in these instances would be consistent with the goals of copyright law, regardless of the technical means by which a user makes the display of the protected work visible to its audience.  Moreover, the photographer may be earning revenue through advertising by allowing an image to be used on Site A, but if Site B, C, and D in-line link the image to their pages, the photographer loses revenue.

Clearly, this has implications beyond news organizations. If, for instance, Johnson & Johnson, by the rationale applied in Perfect 10,  were to display photographs for marketing purposes without permission, this would demonstrably undermine copyright’s intent; and it is hard to imagine that the public would actually support this kind of corporate appropriation of individual labor without permission or compensation. Certainly, every time a site like PetaPixel shares another story in which a business uses a photographer’s work for advertising without permission, I never see anyone cheer for the corporate infringer. (Though they may privately light sparklers or something over at the EFF.)

Is Legislative Reform Needed?

Be it far from this layman to question the statutory interpretations of the 9th Circuit Court of Appeals, but whether it’s in Goldman or another case, a few attorney colleagues tell me that the ruling in Perfect 10 is hardly the final word.  And many of them think the 9th Circuit erred.  But if that court’s “plain reading” of the statute holds sway in future rulings, then it may be necessary to clarify any pre-digital-age, statutory vagueness pertaining to the right make works available.

In 2016, the U.S. Copyright Office issued guidance on the Making Available Right apropos U.S. obligation to WIPO Internet Treaties. Although the Office recommended that legislative amendment was not needed vis-a-vis the treaties, the Register did recognize various inconsistencies in court rulings where cyberspace meets the rights of distribution, public performance, and public display.  In this regard, the Office provided a few possible avenues Congress could pursue to clarify these three exclusive rights relative to the internet, but also warned against approaches that would “represent a sweeping reconfiguration of U.S. copyright law.”

In particular, the guidelines state, “Should Congress … wish to clarify that the public performance and display rights cover offers to communicate a work, it could consider amending the Transmit Clause (§101) to provide that offering to transmit or otherwise communicate a performance or display to the public satisfies the definition of performing or displaying a work ‘publicly.’”  [Emphasis added]

A statutory change like this would confirm that the display right may be infringed by a party that makes a work publicly viewable, even without hosting a copy of the work.  This would correspond with common sense and the practical realities of the digital market, though many attorneys are likely to view such an amendment as unnecessary. Displaying an image on your site, no matter how it got there, ought to implicate the display right.

With pending proposals to create a small claims process for copyright infringement, it will be important to see what the courts do in cases like Goldman v. Breitbart.  This is because visual works are by far the most frequently and casually infringed works on the internet, and visual artists like photographers theoretically have much to gain from both a small-claims process and restoration of a meaningful display right.

Yes, any change in the status quo made by either the courts or Congress would make Google et al go ballistic; and the EFF would have to sit shiva for a year.  But it is well past time to drop the whole “copyright stifles everything” rhetoric along with all the other tech-utopian nonsense that nobody seems to be buying anymore.  It is time to recognize that technicalities like the “server test” stifle authors and creators without whom this whole internet thing would be utterly useless.

**CORRECTION:  Playboy was indeed suing Boing Boing at the time of this post but not for exactly the same conduct.  See post here.

YouTubers losing viewers. What gives?

For years, “old model” artists have been told to quit whining.  Every time some well-known and well-established creator has spoken out about the issue of mass copyright infringement online, or the hazards that monopsonies like YouTube pose for all creators, the response from the “new model” gurus has always been nauseatingly repetitive.  These legacy artists should stop clinging to old models; they should get with the program, stop thinking about selling their works and protecting their copyrights because the internet has rendered such notions obsolete.  Plus, if creators would just wake up to the new realities, they would see a whole world of opportunity to make a living from their work without the evil gatekeepers.

I and others have tried to warn new creators that the “evil gatekeepers” have not been bypassed in the new model, but have instead been replaced by one or two gatekeepers that are at liberty to change the terms and conditions for use of their platforms without any obligation to the creators who helped grow the platforms. The above video by Glove and Boots does a good job (and an amusing one) of describing a phenomenon that apparently a lot of YouTubers are experiencing lately–lost viewers, allegedly due to algorithmic changes on the platform.

I haven’t dug into the details of this story but have heard similar complaints for at least several months now and can’t say that I’m surprised to see cracks in the YouTube model.  It will be interesting to see where things go from here. Presumably, YouTube needs to serve the creators whose works draw viewers to the platform, but I’m going out on a limb to predict that changes at YouTube will make the company look even more like a traditional gatekeeper than it already does.  Correspondingly, I will predict that the new creators will discover that they have something to learn from the old creators.  In particular, if artists like YouTubers are ever going to be in a position to negotiate terms for their work, they will realize that their power to do so is based on this old model called copyright.

NOTE:  I’ve shared this video because it does a good job of explaining what they and other creators believe is happening on the platform.  As for their use of clips from the film Thelma & Louise, I believe it would stand a decent chance of being held a fair use in an analysis, but that should not distract from the intent of this post.

Photo by manae.