Tag: Chris Castle

Let’s Be Sure To Kill the Songwriters

I have said a few times on this blog that contemporary politics in the United States is increasingly reminiscent of the turbulent 19th century.  We only have 2.4 centuries of existence as a nation, and it took half of that time just to begin to fulfill the promise of equality—principally by advancing of the rights of labor relative to the power of capital.  Now, sadly, we seem to be moving in the opposite direction; and a new bill introduced in the House reveals that big capital—shiny digital-age capital—is not quite done eviscerating the rights of songwriters and musical artists.

As long as U.S. public policy is in a general state of chaos, we might as well write a bill that would allow corporations the size of Google and Amazon to steal from songwriters with impunity.  That’s not how Rep. Jim Sensenbrenner’s (R-WI) “Transparency in Music Licensing Ownership Act” is being presented by its proponents, of course, but that’s basically what it is.  And sources tell me there are murmurs within the Judiciary Committee about applying the same rationale (to use the word kindly) to all copyrightable works in addition to music.

A Bit of Context

As many readers know, songwriter David Lowery (of Cracker and Camper Van Beethoven) led a class-action suit against Spotify for publicly performing unlicensed songs.  The streaming company claimed it had made every effort to find the correct parties to pay license fees, but could not locate them.  Normal behavior would suggest that you don’t use the work until you get the license; but asking permission is just not the Silicon Valley way. Hence the lawsuit, which was settled this past May with Spotify creating a $43.4 million fund to compensate the publishers and songwriters whose works were used without license.

Then, as reported in detail by attorney Chris Castle, major music-streaming services—Google, Amazon, Pandora, and Spotify—have been exploiting a provision in the copyright act that was originally designed for single-use, good-faith actors, but which is now a giant loophole for predatory corporations with big computers.  Section 115 states that if the USCO record does not contain address information where a rights holder can be served, a prospective user of a work may instead file a Notice of Intent with the Copyright Office.

The big data companies have been abusing this provision by filing millions of NOIs against songs whose authors can very much be found, if one actually looks.  As Lowery notes in a recent post on The Trichordist, Google allegedly could not find Brian Wilson and so filed an NOI for an obscure ditty called “Surfer Girl.” Think of this NOI maneuver as a temporary liability shield for mass infringement—not an outright exemption so much as an elaborate stall tactic—a hack—that can only be achieved by companies with big computing power.  Meanwhile, creating an outright safe harbor for mass, corporate-scale infringement requires legislative action, and that’s where Rep. Sensenbrenner’s bill enters the story.

HR 3350 is Not What It Seems

On the surface, Sensenbrenner’s bill looks like a modernization initiative. Ostensibly, the proposal would amend the copyright act by mandating that a new database for musical works and sound recordings be created and maintained by the Register of Copyrights.  The bill is being sold as a means to more efficiently get artists paid by updating and fixing the public records.  And while nobody can claim the current, searchable database of the USCO is up to par, this is a) not the reason Google can’t find Brian Wilson; and b) not an issue that will be ameliorated by this half-baked legislation.  Most insidiously, this bill threatens rights holders’ ability to enforce their copyrights at all (more on that below).

Copyright Office modernization is a much-desired, highly-politicized, and underfunded goal that has been in the proverbial works for years.  As such, it seems hardly efficient to introduce legislation, which implies that there is now some urgency to create this database for two categories of works.  Suddenly, we need to develop a music database (which happens to be redundant to those maintained in the private sector) outside the context of any broader agreement about USCO modernization and the appropriations necessary to achieve that outcome.

This suggests that the urgency of Sensenbrenner’s bill is driven by the combined $1.5 trillion worth of corporate entities represented by a lobbying group called the MIC Coalition. Comprising the above-mentioned music streaming companies, terrestrial radio networks, consumer electronics companies, and hotel and retail giants, what these industries like about HR 3350 is that it directly weakens a rights holders’ ability to enforce his copyrights, period.

Preempting Liability

While many critics complain about statutory damages, they are fundamental to any rights holder’s ability to enforce a claim of copyright infringement.  Proving that an infringement has occurred is often quite straightforward, while proving exactly how much harm a specific infringement has done to the owner is far more subjective. For instance, some harm may be qualitative and hard to value in monetary terms.  Thus, the federally-mandated penalties for infringement act 1) as a deterrent; and 2) as an incentive to settle the majority of relatively simple cases in which attorneys for both parties typically know what the outcome of an otherwise costly trial would be.

Registration with the USCO is already required in order for a rights holder to be eligible for statutory damages in a prospective litigation.  But the provision in Sensenbrenner’s bill would mandate that rights holders register via this new database or forfeit their eligibility for statutory damages.  So, among the unanswered questions this bill begs is what it would cost rights holders to newly register and/or maintain their records in this as-yet-undeveloped database.  For instance, would an out-of-date phone number automatically nullify a rights holder’s eligibility for statutory damages in a litigation? And what would it cost a rights holder like a photographer, with thousands of copyrights, to change every record — depending on how the database is designed?

This NPR story by Andrew Flanagan calls HR 3350 “opaque” and quotes attorney Lisa Alter as saying, “It’s basically a prophylactic for copyright infringement.”  And that’s exactly what it looks like to rights advocates—a preemptive measure to evade liability for mass infringement of works, disguised as a modernization mandate. It even has the word transparency in its name to help with that confusion.

What About My Coffee House?

In a much older post, I referenced my local coffee house as a place that hosts an open mic night and, therefore, pays the three major PROs — ASCAP, BMI, & SESAC — and displays a sign at the entrance telling musicians to “play whatever they want.”  While the proprietor is focused on ordering supplies, managing his employees, brewing coffee, baking killer muffins, and catering to his customers, I imagine paying the annual PRO fees is about as much time as he will ever want to devote to thinking about music licensing.

As such, it’s hard to imagine how this small venue owner, and millions just like him, would benefit from this proposal despite the claims by mega-corporation proponents to the contrary.  At best, these databases are useful for prospective users of individual works, but the small proprietor of a bar, restaurant, or store has little to no use for that level of detail. He just wants music in his establishment.

While the language in this bill creates a brand new safe harbor shield for businesses like Pandora, Google, and Amazon—and perhaps even a major hotel chain—it’s likely to be somewhere between useless to harmful to my local coffee house owner.  Sensenbrenner is considered by industry professionals to be an enemy of the PROs, and it’s unclear the extent to which this bill could wind up harming those organizations. If this were to happen, though, that’s about as helpful to a small business owner as saying, “We got rid of the power company, so all you have to do now is buy every kilowatt from a different supplier.”

All Creators Should Reject this Bill

To quote Chris Castle, “It’s rare that the Congress can accomplish the hat trick of an interference with private contracts, an unconstitutional taking and an international trade treaty violation all in one bill.”  But he asserts that HR 3350 would achieve all three of these feats in a single act.  I proposed in a recent post that Napster gave us Donald Trump, which was just a provocative way of saying that I believe we accelerated the devaluation of labor and labor rights relative to capital when we presumed to reject the copyrights of musical artists and literally gave the artists’ money to tech VCs and criminal organizations.  Apparently, that narrative is still being written. Songwriters and musical artists are still the proverbial canaries in the coal mine; and it’s unclear if anyone will notice if they stop singing.

Castle: New Music Licensing Bill is Crony Capitalism

Not only musicians, but authors of all works should be deeply concerned about Rep. Sensenbrenner’s proposed “Transparency in Music Licensing and Ownership Act,” says attorney and blogger Chris Castle.  Describing the proposed legislation as a new “safe harbor” for users of creative works, the new law would effectively abolish liability for infringements by large, corporate-owned business sectors like the American Hotel and Lodging Association, along with usual suspects in the internet industry.

“…if you haven’t undertaken the formality of registering in this new database, then the user has no exposure to statutory damages and will not have to pay the victorious songwriter or artists attorneys’ fees.  And this new safe harbor applies apparently even if that songwriter or artist has filed a copyright registration under existing law,” Castle writes.

See full article here.

The DOJ & Songwriters Simplified (mostly)

The performing rights organization (PRO) called ASCAP was formed on February 13, 1914 when a group of about 100 American composers met at the Hotel Claridge in New York City to create a mechanism for collecting “public performance” royalties.  The 1909 Copyright Act had extended the performance right to this class of copyright holders, but it did not define exactly what “public performance” actually meant.  Part of that definition came with the Supreme Court case Herbert v Shanley Co. (1917), in which Justice Oliver Wendell Holmes offered the opinion that music played in a venue like a restaurant constitutes a “public performance” even if the customers are not charged a fee for the music itself.  The premise was, and continues to be, that the venue relies on music just like other products it needs to run the establishment, and so the music plays a key role in the profit interest of the venue.

In a 1923 case, radio broadcasts were determined also to be “public performances,” but the National Association of Broadcasters (NAB) was critical of ASCAP’s monopoly control over the music and its ability to set licensing rates at will.  In response, NAB formed the competitor BMI, and when this failed to have a mitigating effect on ASCAP’s rates, the broadcasters banned ASCAP music from the airwaves.  That’s when the DOJ showed up and told everybody to get out of the pool.  Justice sued ASCAP and BMI, and both national radio networks at the time, for violation of the Sherman Anti Trust Act.  The result of this action was a rate-setting system known as consent decrees—compulsory licenses the two PROs must grant for “public performances” of their music according to rates set by a “rate court” established at the federal court for the Southern District of New York.

Cathedral RadioFor the next 70 years, the PRO licensing system under the consent decrees generally served all parties—the composer/songwriters, venues and broadcasters, and the general public.  Yes, there are anecdotes describing various ways in which the system has failed or overreached to the detriment of a venue or even a member songwriter; and these stories naturally provide grist for the anti-copyright mill that loves to portray all rights-enforcement regimes as universally extortionist.  But many of these stories cited by critics like Mike Masnick pertain to collecting organizations outside the US, and even those associated with ASCAP and BMI are either old enough or nuanced enough to require deeper consideration in context to the overall cost/benefit of the organizations over many decades.

Fast-forward to the digital-age, when “public performance” is a whole new animal.  Streaming services, which are unquestionably a benefit to consumers, simultaneously reduce demand for sales of physical media and digital downloads, and they reduce demand for traditional broadcast radio, which was the distribution format that led to the consent decrees in the first place.  Plus, streaming affects the worldwide music market almost overnight. Unfortunately, for the songwriters and composers, the rates set for a pre-streaming market were suddenly worth doodley-squat in a streaming market.  This is why you hear about a songwriter making about $30 for a million plays of a song.

So, the songwriters and composers campaigned the DOJ to amend the consent decrees in order to allow more flexibility and more efficiency in licensing—a regime that would better reflect the dramatically changed, digital market. In response, the internet industry and its network of pundits complained that the PROs would then be free to capriciously raise rates, which would “stifle innovation” and harm consumers. For copyright watchers, this is a funny one because this same crowd usually argues that existing laws are doing all the stifling, but in this special case, it’s the WWII-era regime that is actually fostering innovation. Gotta hand it to the DOJ of 1941 for anticipating Spotify like that!

By now, consumers should understand that innovation often means money—money in the pockets of OSP shareholders made on the backs of rights holders who are getting hosed.  But last month, DOJ Deputy Director Renata Hesse not only affirmed the consent decrees, but she went a step further by rejecting the practice of “fractional licensing” for works made through collaborations.  When songwriters or composers represented by different PROs collaborate on a musical work, a user has had to obtain licenses from both organizations.  Hesse ruled that either PRO may license 100% of any work in either catalogue—a decision so deaf and blind to understanding the nature of music licensing that observers like music attorney Chris Castle can only conclude that Hesse’s former role as a Google attorney provides the only rational explanation.

Meanwhile, in an August 8th post on Techdirt, Mike Masnick ‘splains how the DOJ decision was not only the right decision, but one that will be “good for songwriters,” even if the songwriters are too naive to realize it yet.  I’ll let that hubris hang there for a moment, and then quote this refrain of one of Mike’s favorite saws:

“It’s kind of insane that we have to point this out over and over again, but the legacy industry always fights against new innovations in the false belief that it will harm revenue — yet when they learn how to embrace the opportunities, it turns out that a larger audience has been created and there are even more ways to make money.” 

I can’t decide which is more arrogant, the unwavering faith that he knows better than all the songwriters what’s best for them, the feigned exasperation at having to explain it again to these dumb songwriters, or the use of the royal we in this statement.  Or was that a revealing slip?  Which we is he speaking for here?

Of course, it may not matter what the pundits think because the DOJ may have opened up Pandora’s Box to let the music fly away.

As David Lowery explains—and David has written like way more songs than Mike Masnick—the DOJ may have spawned an unenforceable clusterfuck, the result of which could be tracks disappearing from streaming and other services.  In a recent blog post, Lowery states that it could cost him thousands of dollars in legal fees to revise the contracts between him and collaborators on a portion of his catalog.  In fact, some of those collaborators have passed away, so he would have to negotiate with their estates, making the process even more complicated. Can the DOJ constitutionally compel Lowery and thousands of other songwriters and composers to incur these legal fees to rewrite these contracts? We should hope not.

So, what will songwriters in this circumstance do?  The most cost-effective thing for them to do would be to pull the tracks from ASCAP & BMI that are more trouble than they’re worth.  That will reduce the music available on streaming services and also create a thorny problem for venues currently paying PRO licenses.  Right now, the coffee house where I’m sitting has all three licenses—ASCAP, BMI, & SESAC—and can play any song without worrying about it.  What happens if portions of the ASCAP and BMI catalogs are no longer covered by their licenses?  This is just a glimpse of the “chaos” the Copyright Office and others warned the DOJ would ensue as a result of their ruling this way on consent decrees.

The entire history of American copyright is one in which the contours of the law have been reshaped to conform to changing market conditions in order to protect artists and maintain the incentive to create and distribute.  As is so often the case today, the DOJ seems to be taking the narrow, Googley-eyed view that artists will continue to create and distribute no matter what happens.  Consumers are free to decide whether the songwriters know what they’re talking about or the copyright antagonists are correct.  But if they choose to ignore the former, I really hope they like the musical stylings of the latter.