For those following our substantive music business postings, the answers to the problem on controlled compositions will be in the April 13 edition of the monthly (signup under the Artist Authorized button), and will be posted on MTP at the end of the month.
For the last few weeks, we have posted sections from the article “20 Questions for New Artists” by Chris Castle and Amy Mitchell some of which has been posted various places. If you are interested in getting a free copy of the basic article, write to email@example.com. (Given the level of interest, the deadline is extended until they have the next version “Another 20 Questions for New Artists.”)
20 Questions: Artist Glossary of Industry Terms: Controlled Compositions Clause, Part 1
Twenty Questions for New Artists Series by Chris Castle and Amy Mitchell:
See also: ISRCs/Unions/Side Projects
See Also: Pre-Existing Contracts and Aggregators
See Also: Band Administrator/Split Sheets
See Also: Performing Rights Society Affiliations
See Also: Bank Accounts/Tax Returns/Accountants
See Also: Have you Registered with SoundExchange?
“We won’t (and shouldn’t) try to stop the faceless scribes of drivel, but we can move them to the back row of the arena.”
Jonathan Rosenberg, Senior Vice President, Product Management, Google, Inc.
Yesser, I got your net neutrality right here.
We will get into this in more detail, but YouTube fans may enjoy reading the handy Criminal Resource Manual published by the United States Departement of Justice (of Google Books fame, among other things). In particular, Chapter 1847 “Criminal Copyright Infringement“:
“There are four essential elements to a charge of criminal copyright infringement. In order to sustain a conviction under section 506(a), the government must demonstrate: (1) that a valid copyright; (2) was infringed by the defendant; (3) willfully; and (4) for purposes of commercial advantage or private financial gain. Attempts to infringe are prohibited to the same extent as the completed act. Conspiracies to violate the Act can be prosecuted under 18 U.S.C. § 371.”
Although not at all unexpected, the YouTube discovery has revealed a couple of things. First, this is some really unambiguously depraved correspondence, far worse in my view than anything we saw in the Grokster case and makes the intent to infringe (that the Supreme Court required in Grokster) very clear, but then I’m a “copyright bastard” at heart. What is also clear from Grokster (and more recently, the Isohunt case) is that the DMCA safe harbor is not an alibi.
While I’m sure that these disclosures are embarrassing for the more junior folk, the first question that comes to my mind is where was the board? Particularly the YouTube board pre the acquisition, but also the Google board. The next question is what in the world was the legal advice? This is the kind of thing that should make a lawyer resign. There should not be different spanks for different ranks in this thing. There is plenty of blame to go around—up and down the chain.
You also have to wonder how it was that YouTube claimed—and still does claim—that it had no control over what users uploaded when there is an extensive discussion in the internal emails that seems to suggest the exact opposite. YouTube seems to have had an extraordinary degree of control over what was made available.
The post-acquisition evidence clearly supports the view that many have of Google—they will take everything that they can until they are forced to stop by a court order after vigorous litigation. That means that they run roughshod over everyone (like authors and artists) who can’t afford to fight while they use their access to the public markets to essentially print money to fund their litigation strategy. That’s not what Wall Street is there for.
This may also explain why Google’s vast public market resources are being devoted to shrouding the case in as much secrecy as possible–the latest example being the all out attack on Robert Tur, the hero helicopter pilot who along with his camera operator saved 54 souls from disaster by flying through 60 kt winds and rain–because he was asked to do it. One of the things I haven’t been dumb enough to do is fly through the air in 60 kt winds, but I have sailed through those heavy airs–the main reason why I don’t want to fly through that soup.
Of course, these are things that will not be understood by his present company at bar.
Tur is accused of leaking an unredacted version of Eric Schmidt’s deposition. Given the apparent reeking spoliation of evidence by YouTube and the dog ate my homework, “I know nothing” amnesia by the Don’t be Moral executives at Google, it is rather refreshing to see someone doing the right thing in the case. It is a sad commentary on Google’s influence that a whistleblower hero is being pursued to preserve the “privacy” of a two Gulfstreamer.
How’s that ACLU award looking, Dr. Schmidt? Pretty transparent?
“‘Disconnection would be the best thing to happen to some of these people,” he told me. “They’d get out the house, meet girls, and go for a walk.’”
Wonderful coverage by Andrew Orlowski of the Pirate Party’s latest effort to get themselves arrested. Thankfully, the Metropolitan Police didn’t take the bait. That’s what CCTV is for, anyway, right?
Record companies must license the right to sell reproductions of songs in records (or what the Copyright Act defines as “phonorecords”). Record companies (and I use the term broadly to include any distributor of phonorecords) typically will negotiate the maximum mechanical royalty rate that they must pay on records they release. These terms apply to songs written, owned or controlled by the recording artist. These special terms are found in a clause in the recording artist agreement which is called the “controlled compositions clause.” The terms typically will include a maximum cap, a reduced mechanical rate applied as a percentage of a fixed rate and a limitation on the types of records for which a mechanical is paid. For example, a maximum rate of 10 times ¾ of the minimum statutory rate on the date of delivery of the record concerned applied to sales of records for which an artist royalty is also paid would be a fairly customary (and low) controlled compositions rate.
Controlled compositions clauses do not apply to sales in the world outside of the United States and Canada, and even in the United States and Canada there have been developments that reduce the effects of certain controlled compositions clause provisions, especially for digital sales.Controlled compositions clauses must be carefully negotiated, particularly in light of the prevalence of 360 deals.
The deal memo for your record deal has this section:
Controlled Compositions: 10 x 3/4, 5 on EP, 2 on Single, bumps to 87.5 and full at gold and platinum, full on digital and club, 3/4 of 3/4 on mid and budget, protection for 2 outside, rate fixed on delivery, no crossing, paid on royalty bearing, US and Canada.
What did you just agree?
Answer next week.
Remember Lessig’s hysterical defense of the “hybrid economy”? How about hybrid economist and public record remixer Lonelyclassmates.com? According to Wired, yet another site preying on the isolated and disconnected as been on the receiving end of a user lawsuit and a $10 million or so settlement.
Here’s a tip for the plaintiffs: Get the money, get the money, and be sure and get the money.
When the typical Web 2.0 company hits the wall, they flip the keys to the first bum on the street and head for mommy’s couch.
Canadian Music Week: I was able to introduce Jaron Lanier at the Global Forum which was very well attended. Jaron is a brilliant guy and I learned a lot from both his book and his speech. Jaron gives the bedrock of Web 2.0 (as well as the singularity movement) a good shake, and that naturally stimulated good discussion. I’m always impressed with CMW as a platform for Canadian music and enterprise (and since I lived up there for many years, I’m always glad to go “home”).
SXSW: Another great year for SXSW, in the educated rumor mill, Interactive exceeded Music in number of badges sold (which may mean more people with expense accounts go to Interactive than to Music). SXSW is truly becoming a premier international festival and conference, and I frankly think that unless you live in Europe or you’re a publisher, there’s not much point in going to MIDEM if you go to CMW and/or SXSW. My panels were on graduated response and on the NMPA settlement.
We had a good international turnout for the graduated response panel sponsored by IAEL, and it was great to have Dina LaPolt and Susan Abramovitch on the panel to give the perspective of the international artist community. Part of the discussion focused on the Isle of Man project, which is a form of the global license that the copy-mad types tried to get going in France except at 1 euro a month instead of 5. I don’t get the impression that there is a copy-mad element to what they’re doing, but I still think that trying to have a network focused solution is going to be very difficult to get off the ground. I also still have a problem with flat fee licensing for all the usual reasons.
The panel got some great audience questions, particularly from people who pointed out some of the technical problems with the network licensing model. There was a particularly good question that prompted the question of examining online theft in the larger context of cybersecurity and net pollution.
Jay Rosenthal did a superb job of moderating the NMPA Settlement panel, which made a pretty process-oriented (read “dry”) topic a lot more fun and even funny at times. Jay and Steve Englund discussed the details of the deal they negotiated, and my role was to fill in the “how we got here” part.
Jay also moderated a very good CLE panel on legislation with Terrie Bjorklund from AFTRA and Lee Knife from DiMA that focused on net neutrality and the Performance Rights Act. The panel had an in-depth discussion of artist rights and the ability of artists to be equitably remunerated for their labor (See Artist Rights are Human Rights).
I also heard Feargal Sharkey, CEO of UK Music, give a great talk about the future of music online and the importance of UK Music. What is different about UK Music is that it represents all the rightsholders in the UK which gives Parliament one voice to listen to, an idea we should pay attention to in the US. I was very impressed with this idea from a legislation strategy perspective (and I know that forming the organization wasn’t easy). I also think that it’s great that someone with an artist background like Feargal is running the show.
For those of you who read my friend Guy Forsyth’s post, “Sausage, Justice and the Music Industry“, you will appreciate the results of the vote of artist and songwriter creditors in Chapter 11 bankruptcy proceedings regarding how the Texas Music Group has treated them. The Austin Chronicle sums up the ruling on Monday in the company’s Chapter 11 reorganization: “‘I’ve sat through a lot of hearings on this case,’ concluded [Bankruptcy] Judge Craig Gargotta. ‘I think management has been at fault for this…. It’s time for a new day; it’s time for new management; it’s time for new leadership.’” (See “Texas Top Hand“)
“[Guy] Forsyth, who released three albums with Antone’s Records – 1995′s Needlegun, 1999’s Can You Live Without and 2000’s Steak – has exhaustively fought for his unpaid royalties with help from a pro bono legal team he readily admits he could never afford otherwise. ‘This is the closest thing I’ve seen to justice in the music industry. I’d love to get the chance to actually work those records.’” (See “Into The Vault“.)
There may be a lesson here–perhaps the law should be that if a record company fails to pay mechanical royalties or artist royalties for years and years and years at some point the artists and songwriters should get to vote on whether the company should continue in business. A novel idea, I know, but worth giving further thought.
I had the great gift of having worked for Herb Alpert and Jerry Moss at A&M Records, two of the all-time great record men and humanitarians. Whenever I have to make a decision about what’s the right thing to do for an artist, I ask myself what would Herb and Jerry do. And that advice is never wrong.
See also Artist Rights Are Human Rights
Jaron Lanier is the most thoughtful critics of the “information wants to be free” and “sell another T-shirt” crowd at Google’s Singularity University that I’ve ever heard. In fact, he’s one of the more thoughtful people I’ve ever heard. I was lucky to be able to introduce him at Canadian Music Week, and appreciated his guidance–hopeful and optimistic, realist and staring the copyradical crowd right in the teeth. There is a video of another talk on Zocalo Public Square.
(See Rob Thompson’s excellent article “Jaron Lanier Says Free Won’t Work“.)
I highly recommend his book, You Are Not a Gadget–buy it today, don’t wait til it comes out on Bittorrent.
See also: Artist Rights Are Human Rights
When you follow a subject, there is a tendency to roll the eyes when you have heard the same arguments made for a number of years. It’s important to remember that while you may think that a message walks like a canard, etc., just because it’s not new to you doesn’t mean it’s not new to someone else. It’s very easy to think that someone’s message is so obviously talking like a canard, how could anyone not see it and reject the message?
Easily. Just because it’s not new to you doesn’t mean it’s not new to someone. Also, if people keep banging the same message, it’s probably because they think it works for them.
So it is with the EFF’s “Don’t Let Hollywood Hijack the Internet” petition campaign. Here’s what they told the FCC Chair Julius Genachowski that the petition said:
“To the Federal Communications Commission: Your October 22, 2009 Notice of Proposed Rulemaking seeks to create an exception from network neutrality and open Internet principles to allow ISPs to block or filter content which they suspect might be copyright-infringing. I believe this exception would be damaging to lawful fair use, free speech and innovation on the Internet, and that it should be removed.
Sincerely [A bunch of names] ”
We have a real skepticism about online petitions around here, particularly given the experience in Canada. But leave that to one side.
What is clearly not included in the EFF’s letter to Mr. Genachowski is toute les salade surrounding the online petition–so if the Chair just read the EFF filing he would not get the complete picture, he would miss the color commentary.
The petition website (http://www.realnetneutrality.org/) reads: “For years, the entertainment industry has used that innocent-sounding phrase — “unlawful distribution of copyrighted works” — to pressure Internet service providers around the world to act as copyright cops — to surveil the Internet for supposed copyright violations, and then censor or punish the accused users.
From the beginning, a central goal of the Net Neutrality movement has been to prevent corporations from interfering with the Internet in this way — so why does the FCC’s version of Net Neutrality specifically allow them to do so?”
There you go again—“copyright cops” etc., etc., ad nauseum, ad infinitum.
But then this bit caught my eye:
“[Petition signers: ] Tell the FCC that if it wants to police the Internet, it first needs to demonstrate that it can protect Internet users and innovators by standing up to powerful industry lobbyists. Sign your name here to demand that the copyright-enforcement loophole be removed.”
“Powerful industry lobbyists”. Now who might that be?
How about this from the EFF’s FCC reply comment filing delivering these “signatures”:
“In addition to this direct input from members of the public, a number of public interest and industry groups, including the Computer and Communications Industry Association (Google, et al), the Consumer Electronics Association (Google, et al), Home Recording Rights Coalition (undisclosed members), NetCoalition (Google, et al), and Public Knowledge, agree that the Commission’s definition of ‘reasonable network management’ should avoid creating any exception that would allow ISPs to inflict collateral damage on lawful content and activities in the course of interdicting unlawful content or transmissions.” (“Collateral damage”? Really?)
And then there’s the old standbys, the Consumer Electronics Association and Home Recording Rights Coalition. What’s strange about the EFF’s reply comments is that while the letter dutifully ticks off the largest “Big Tech” lobbyists (safely camouflaged in a list that includes “public interest groups”, but very present), it seems to imply that somehow the purported signers of the EFF petition support the views of these “powerful industry lobbyists.”
However, the petition website said nothing about the CCIA, the Consumer Electronics Association or the Home Recording Rights Association, or any of the others for that matter. All those lobbyists represent Corporate America, baby. Do you think that the petition signers who were lured in by the “Real Net Neutrality” slogan “Tell the FCC: Don’t Let Hollywood Hijack the Internet!” would have been more or less likely to be signed up if they knew their petition was being used to further the corporate goals of CCIA member Google (the monopoly privacy invader) and the legion of other “Big Tech” companies whose combined market caps vastly exceed the entire entertainment industry? They don’t have to hijack the Internet, they “own” it already. And why just “Hollywood”? How about London, or Bollywood, or Toronto, or Austin, or New Orleans, or Seattle, or Paris….
Do you think that these petition signers would have been more or less likely to sign up if they knew that the position the EFF attribute to “Hollywood” is also the position of the AFL-CIO? Any AFL-CIO members among the signers? How about members of AFTRA, SAG and the Songwriters Guild of America? Since nobody bothered to disclose on the Real Net Neutrality website that the plan was to use these signers to create an implied endorsement of Big Tech, does anyone plan on telling them now?
Well, it should come as no surprise that they didn’t bother to ask. Adding the Big Tech names to the petition is just a remix after all, right? It’s not like they violated anyone’s rights or anything.
If it walks like a canard, talks like a canard, smells like a canard and quacks like a canard—it’s a canard. No matter how many times you’ve seen it before.
See also: 100,000 Voters Who Don’t Exist
See also The Geist in the Hen House