Music Modernization Act Archives - IPOsgoode /osgoode/iposgoode/tag/music-modernization-act/ An Authoritive Leader in IP Thu, 24 Nov 2022 17:00:00 +0000 en-CA hourly 1 https://wordpress.org/?v=6.9.4 Could this music law help Spotify dodge future copyright infringement battles? /osgoode/iposgoode/2022/11/24/could-this-music-law-help-spotify-dodge-future-copyright-infringement-battles/ Thu, 24 Nov 2022 17:00:00 +0000 https://www.iposgoode.ca/?p=40264 The post Could this music law help Spotify dodge future copyright infringement battles? appeared first on IPOsgoode.

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Alice Xie is an IPilogue Writer and a 1L JD Candidate at Western University’s Faculty of Law.


Do you remember contemplating whether you liked a trending pop song enough to spend $4.99? With the rise of online streaming services like Spotify and YouTube over the last two decades, listening to music has arguably changed for the better. However, with the convenience of streaming music through these digital platforms, the music industry has also had to deal with a wide range of copyright issues, including online copyright infringement. A look at streaming giant Spotify’s recent significant copyright battles provides some insight into the issue of on online streaming platforms.

Spotify’s Recent Significant Battles

Spotify has encountered its fair share of copyright infringement lawsuits filed by music artists, record labels, and publishers. In 2015, guitarist David Bowery filed a lawsuit against Spotify USA, a Spotify subsidiary, for streaming songs without first , which are the standard payment for reproducing or distributing a song. Spotify settled the lawsuit with . In 2017, music publishing company Wixen also filed a against Spotify USA, seeking $1.6 billion. Wixen claimed that Spotify from its represented artists, which resulted in the artists and publishers not receiving royalties when customers streamed their work. Spotify and Wixen mutually agreed to in 2018. In 2020, two entertainment companies filed against Spotify and other streaming services for not receiving royalties for their streams. The issue of inadequate artist compensation is not unique to Spotify, but applies to all streaming services.

New Copyright Law: A Solution for Spotify

The relevant US copyright law is , which states that a person or entity seeking to distribute a musical work must first obtain a compulsory license. One can obtain a compulsory license by filing a notice of intention (“NOI”). In 2018, the US Congress passed a law called the (“MMA”), which seeks to alter the licensing system for the better and take charge of the compensation process. Title 1 of the MMA is especially relevant, as it establishes a for digital music providers. The blanket licensing system covers all musical works available for compulsory licensing, which means that streaming services will no longer need to file an NOI for each song or work. The MMA also established the Mechanical Licensing Collective (“MLC”), which administers the blanket licenses and more notably, maintains a containing information on the musical works and their copyright owners, if known. The law was set to .

Inadequate artist compensation may be partly explained by the difficulty of accurately identifying the rightsholders of each work, given the volume of music works. Digital service providers cannot locate the recipients of royalties. Lesser-known music artists are even more vulnerable to copyright infringements in this way. The MMA ideally solves this difficulty through the public database, which centralizes all information relating to musical works into one place. This provides parties like streaming services seeking compulsory licenses with a recognized source of rightsholders from which to draw. Additionally, the database validates artists’ possession over their works that will not be easily taken. If correctly implemented, the MMA can advance the collective goal of creating a digital music ecosystem where streaming services grow their platforms by legally acquiring distribution rights and artists, publishers, and record labels are rightfully compensated for their work. We may look to future copyright infringement cases to inform the ѲѴ’s effectiveness.

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The Changing Nature of Sound Recording Rights /osgoode/iposgoode/2020/10/22/the-changing-nature-of-sound-recording-rights/ Thu, 22 Oct 2020 15:00:21 +0000 https://www.iposgoode.ca/?p=36011 The post The Changing Nature of Sound Recording Rights appeared first on IPOsgoode.

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The ongoing history of sound recording rights continues to provide a fascinating study in the United States’ copyright regime’s ability to contemplate and absorb new technologies into its framework. The evolution of these rights in America over the last 50 years charts alongside the country’s evolving music industry, crystallizing the importance, and distinctiveness, of music law in relation to the broader copyright regime.

Over the last 20 years, global music industry players have seen traditional revenue streams decrease as the shift towards digital distribution has intensified. In 2018, reported global revenues from recorded music With the worldwide concert industry grinding to a halt, for performers and copyright owners alike, the effect of COVID-19 on the global music industry has placed a spotlight on moving the conversation on sound recording rights forward.

On September 9th through 11th, 2020, the hosted . Streaming online from in Arlington, Virginia, day one of the conference saw panelists tackling a number of topics in music law, including the colourful history of sound recording rights in America and their current status under the US copyright regime. The below provides a deeper look at the issues discussed during the on September 9th.

Looking Back: The Music Modernization Act

Revenues from recorded music have grown over the last five years in the US, . In 2019, revenues from recorded music grew 13%, primarily through paid subscription services. Total revenues from streaming alone grew 19.9% in 2019, accounting for almost 80% of all recorded music revenues in the United States.

Consider these statistics against the legislative backdrop that governs the payment of royalties for recorded music. On October 11, 2018, (H.R. 1551) (“MMA”) was signed into law by President Donald Trump. The MMA combines three previously introduced bills intended to modernize copyright law as it relates to the music industry.

Title I of the MMA is the Musical Works Modernization Act, which impacts the conversation on sound recording rights in a number of ways. First, Title I changes the standard used by the Copyright Royalty Board (“CRB”) in setting digital royalty rates, bringing the standard used for digital radio stations up to date. Under the old regime, the standard used for setting statutory royalties relied on public interest considerations, preventing the CRB from considering what a licensee might pay as a market rate. Under the MMA, the rates for all compulsory blanket licences are to be determined through a market-based standard, sometimes referred to as a willing buyer/willing seller standard, ideally creating a fairer standard of compensation for the owners of sound recordings.

Further, Title I establishes the Mechanical Licensing Collective (MLC). While the primary role of the MLC is to collect and distribute section 115 mechanical publishing royalties, it has also been tasked with the creation of a Musical Works Database, intended to link sound recordings to their underlying compositions. In theory, the database will provide music users with a one-stop shop for uncovering all potential rightsholders involved in a song, on both the sound recording and the composition side.

Title II of the MMA tackles the grey zone inhabited by pre-1972 recording artists, otherwise known as “legacy artists”. The Classics Protection and Access Act extends the same protections to the digital public performance of pre-1972 sound recordings as those extended to post-1972 recordings. The practical outcome of this legislation? Digital radio stations and streaming services are now responsible for paying royalties for the expansive catalogue of pre-1972 recordings in their repertoires, according to the uniform rate setting standard outlined in Title I.

Title III, The AMP (Allocation for Music Producers) Act, creates a new “letter of direction” process, allowing recording artists to distribute a portion of the royalties collected for a sound recording to the producers, sound engineers or mixers involved in its production. Title III enables SoundExchange, the entity collecting and distributing sound recording royalties under section 114 statutory licenses, to distribute these royalties directly to the producers involved on behalf of recording artists who submit a “letter of direction” outlining their intention to make such a payment.

Simply put, and as it currently stands, the US legislation regarding sound recording rights maintains its focus on digital plays. What about analog?

Looking Forward: AM-FM Act

The , introduced to , is a bi-partisan bill aimed at creating a terrestrial radio (AM/FM) performance right for sound recordings. The AM-FM Act arrives following the Fair Pay for Fair Play Act, introduced in both 2015 and 2017 with the same goal, but which failed to pass.

Supporters of the AM-FM Act describe it as ending a “” stemming back to the early days of radio that has allowed AM-FM radio broadcasters to play recorded music on air without obtaining the permission of the recording’s copyright owner, and without paying royalties for the use. In essence, it is argued, terrestrial radio broadcasters are being subsidized by the recording industry and will continue to be until the creation of an AM-FM radio performance right in sound recordings.

The National Association of Broadcasters has of the AM-FM Act, countering with their support of the , stating that “Congress should not impose any new performance fee, tax, royalty, or other charge relating to the public performance of sound recordings on a local radio station for broadcasting sound recordings over the air, or on any business for the public performance of sound recordings on a local radio station broadcast over the air”.

In contemplating the ongoing battle over the creation of a terrestrial broadcast performance right in sound recordings, we’re provided with the opportunity to consider the role of analog radio in a digital era, and to think through the questions of promotion versus consumption that relate to music copyright as a whole.

Today: CUSMA

One is that while countries with a terrestrial radio performance right for sound recordings collect royalties for American artists whose sound recordings are played outside the US, they are unable to pass on these royalties to US rights holders as there is no domestic royalty scheme. In , SoundExchange identified 6 territories which deny full national treatment to American recording artists - UK, France, Australia, Japan, the Netherlands, and Canada.

On July 1, 2020, the Canada-United States-Mexico Agreement (CUSMA) entered into force in Canada, providing full national treatment to sound recordings. states at Article 20.8 that “in respect of all categories of intellectual property covered in this Chapter, each Party shall accord to nationals of another Party treatment no less favorable than it accords to its own nationals with regard to the protection of intellectual property rights”. As explained by panelist and Attorney Eric Schwartz of Mitchell Silberberg & Knupp, Canada’s implementation of its CUSMA obligation to give national treatment to sound recordings is sure to result in new payments to American copyright owners for uses occurring in Canada.

The effect of COVID-19 on the worldwide music industry has put the focus on the copyright regime’s ability to respond to change, both cultural and technological. For those interested in music law, and in the modernization of copyright more generally, the complicated and curious history of sound recording rights provides countless jumping off points for creatively thinking through the issues affecting artists and copyright holders today.

Written by Meghan Carlin. Meghan is in her second year at Osgoode Hall Law School. In addition to her work with the IPilogue, Meghan is a Fellow with the Innovation Clinic and is Co-President of the Osgoode Entertainment and Sports Law Association.

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The Evolving Music Ecosystem Conference: Day Three Recap /osgoode/iposgoode/2020/10/08/the-evolving-music-ecosystem-conference-day-three-recap/ Thu, 08 Oct 2020 16:44:24 +0000 https://www.iposgoode.ca/?p=35966 The post The Evolving Music Ecosystem Conference: Day Three Recap appeared first on IPOsgoode.

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On September 9-11, 2020, the Center for the Protection of Intellectual Property (CPIP) hosted conference online from George Mason University Antonin Scalia Law School in Arlington, Virginia. The conference featured a keynote address by singer, songwriter, and author Rosanne Cash.

This unique conference continued a dialogue on the music ecosystem begun by CPIP Executive Director Sean O’Connor while at the University of Washington School of Law in Seattle. In its inaugural year in the D.C. area, the conference aimed to bring together musicians, music fans, lawyers, artist advocates, business leaders, government policymakers, and anyone interested in supporting thriving music ecosystems in the U.S. and beyond.

SESSION 5: THE POWER OF DATA OWNERSHIP & ANALYTICS

Access to consumer data and the ability to process and respond to it is perhaps the most valuable component of our digital global ecosystems—no matter the industry. In the music business, collecting and analyzing data about listeners and their habits is occurring on a massive scale, and it’s informing the development of new business models and platforms. But questions of ownership and data sharing loom large, as musicians increasingly realize the value of knowing more about their fans. This panel discussed the current state of data collection and analytics in the music industry and explored ways that big data can foster creative ecosystems for all stakeholders. The panel was moderated by Prof. Sean Pager of Michigan State University College of Law.

Prof. Serona Elton from the University of Miami Frost School of Music kicked off the panel by describing the various places where artist data is aggregated, such as Spotify for Artists, Apple Music for Artists, Soundcharts, and collective management organizations (CMOs). Prof. Elton emphasized that while the number of data sources and quantity of data is extraordinary, the quality of data and specificity of the sources vary drastically. Moreover, while that data is accessible to everyone, the utility and granularity of the data will vary depending on who you are and how you want to use it.

Joshua Friedlander from the Recording Industry Association of America (RIAA) then described the history of data tracking in the music industry. Data analytics became prominent in the 1990s when the RIAA was tracking roughly a billion point-of-sale transactions for recorded music annually. Nevertheless, those billion transactions have been dwarfed by the 1.5 trillion datapoints the RIAA now tracks annually in the U.S. alone. Moreover, where the data of the 1990s merely tracked when and where a record was sold, music industry data today is infinitely more complex. The music data we collect now includes the demographics of the consumer, how long they consumed the song, how often they consume it, and many more analytics that continue past the point of sale or download. As a result, record labels and marketing plans are so intricately related to data that few will approve a marketing campaign without data-backed guidance. Finally, Mr. Friedlander advised artists to retain only representatives who understand and use music data. Without looking at this data to understand the disposition of fans, contemporary artists will have a more difficult time achieving success in this data-driven music business.

Prof. Jake Linford from Florida University School of Law followed Mr. Friedlander’s discussion of the endless potential of artist data with a critical discussion of the safety and usefulness of current data collection and analytics efforts. Prof. Linford agrees that this extraordinarily granular data has unlimited potential, but he also thinks that not all aspects of its potential are positive. For example, the data technology companies collecting from your online consumption habits may be able to help artists and record labels understand what style of music is likely to create the next big pop song. Nevertheless, such data collection can also reveal potentially sensitive information about users, such as political affiliation and sexual orientation. Prof. Linford went on to discuss how this data can also allow AI-driven robots to create compositions without human intervention. While many are excited about the prospect of robot artists, this does create an interesting philosophical debate of what constitutes a creator.

Prof. Tonya Evans then led the panel into a discussion of disintermediation in the music industry. Prof. Evans explained how too many gatekeeper intermediaries in music needlessly create friction. She recommended that blockchain can streamline music distribution and remove many of these costly friction points, which would leave more money for artists. However, despite the promise of modern internet technologies, she recognized that the effectiveness of streamlining music distribution with current blockchain technology is curbed by the pervasiveness of piracy. Prof. Evans then suggested that a solution to music piracy—which could pave the way for efficient music licensing—could be through a disaggregated, decentralized network of blockchain payment and smart contracts. She anticipates that this sort of technological framework could provide the certainty and trust that music stakeholders need to distribute music securely and efficiently.

Finally, Will Page, the former Chief Economist of Spotify, began his presentation by rehashing and analyzing some of the main points made by the prior panelists. Particularly, he found blockchain to be a less capable solution in the music industry because of the issue of conflicting song metadata. Instead, he suggested the creation of a global repertoire database that would provide needed clarity in the music rights environment that regularly misattributes—or outright fails to attribute—artists to particular songs. Mr. Page later suggested that a country’s best solution to straightening out its broken song attribution status quo would be to create a natural monopoly to act as a central copyright depositor to coordinate with licensees. He then went on to stress the importance of music’s big data conversation, which he suggested should drive music innovation over longstanding industry customs. For example, the music industry continues to rely on country-level data for identifying fans because of longstanding touring customs, rather than the city-level data we have access to that is vastly superior due to its granularity.

SESSION 6: ARTIST MANAGEMENT & THE BUSINESS OF MUSIC

In today’s music business, when artists can act as their own producers, promoters, booking agents, managers, etc., is there still a need for traditional representation? What is the role of an artist manager? How has it evolved as the internet and interconnectivity have grown? This panel, moderated by Prof. Robert Heverly of Albany Law School, brought together artists, managers, lawyers, and venue owners to discuss the constant evolution of artist representation and the business of music.

Prof. Olufunmilayo Arewa from Temple University Beasley School of Law opened the panel by explaining how marginalized groups have been short-changed by record agreements in the past. Prof. Arewa described the financial discrimination and general injustice that has been felt by African American musicians for generations. For example, African American R&B artists between the 1960s and 1980s received royalty contract rates worth 20-60% of what were considered standard rates. Moreover, she noted that an additional consequence of failing to compensate African Americans and other groups fairly is that they cannot receive union sponsored health insurance. Finally, Prof. Arewa highlighted that considering the Black Lives Matter movement, there have been various proposals on how to make amends for past royalty rate inequities.

Attorney Lita Rosario carried on Prof. Arewa’s conversation about the injustices felt by marginalized groups by discussing her personal experience litigating unfair royalty agreements on behalf of African American artists. She then outlined her work in striking the down the “sharecropping” agreements between artists and record labels in favor of joint venture arrangements. Ms. Rosario noted that in the traditional sharecropping model, an artist’s royalties must recoup the recording costs before she is given any share of her royalties. In her proposed joint venture agreement, the artist would instead begin to earn royalties on the day the album breaks even. Also, Ms. Rosario noted, while it is a positive that major record labels have committed around $225 million to promote anti-racism, this gives little solace to those who continue to suffer from the chains of inequitable contracts.

Simon Tam of the award-winning band The Slants then brought home the conversation about systemic racism and marginalization in the music industry by speaking about his personal experience navigating injustice. He recalled an incident when a record executive offered his band a substantial record deal, so long as they replaced their Asian lead singer for a white person. The executive said this was because “Asians don’t sell.” Mr. Tam confronted the executive about the racism and walked out on the deal. Since then Mr. Tam and his band have leveraged online independent distribution platforms to release their music, which has allowed them to create a successful career without label involvement. However, he explained that artists who forgo record label agreements will generally need to find the right group of representatives to champion their careers. The music industry is full of complex arrangements and niches, which is extremely difficult to navigate on one’s own.

Ralph Jaccodine, who is an artist manager and a professor at the Berklee College of Music, then rounded out the panel by providing the perspectives of the record label and artist manager. Prof. Jaccodine emphasized that modern artists can no longer confine their activities just to creating music. Prof. Jaccodine believes that artists need to be able to wear a bunch of different hats in the music industry so they can delegate aspects of their business to effective representatives. Artists need to educate themselves about their business and understand how activities from concert promoting to publishing function so that they can hire the right representatives to drive their careers. Without a knowledge of their business, artists can be taken advantage of and will not know if a particular manager or agent is worth hiring. Prof. Jaccodine encourages artists that they don’t need record labels to be successful—just knowledge and a good team.

SESSION 7: SUPPORTING ARTISTS & COMMUNITIES

Recognition of and support for local artists and musicians is vital to the preservation of creative and culturally diverse communities. Whether full-time professional musicians or part-time hobbyists, creative individuals’ contributions to their communities are invaluable and difficult to measure. But like many who make a living through artistic endeavors, musicians often struggle to find steady work and lack the benefits that many of us take for granted. Musicians also often encounter mental health and substance abuse issues at a greater rate than non-artists. This panel discussed ways a vibrant music scene can benefit a community, ways that communities can give back, and resources available to musicians in need. The panel was moderated by John Good of the Washington Area Lawyers for the Arts.

Prof. Ying Zhen of Wesleyan College kicked off the panel by discussing her 2018 survey concerning the wellbeing of modern musical artists. This survey was an in-depth, multidimensional study involving 1,000 artists who identified as full-time musicians with sustainable careers and those who were transitioning into such careers. From this data, Prof. Zhen and her team were able to uncover interesting information about the modern working artist. For instance, Prof. Zhen identified that the median income from music for these artists was $35,000 per year, the median artist has around 3.5 different music income streams, and that one-third of their yearly income came from non-music sources. And while much of her research concerned the financial wellbeing of artists, Prof. Zhen also collected data on their general wellbeing. Unfortunately, this research tended to show that artists found the financial instability of music challenging, drug usage by artists in this survey was higher than the national average, and that 76% of women in music reported experiencing sexual harassment. Although these figures did not paint the rosiest portrait of artist wellbeing, Prof. Zhen hopes this survey will bring about social and financial change by educating artists and policymakers on the everyday struggles of artists.

Jennifer Leff from MusiCares then followed Prof. Zhen’s presentation by discussing the resources that MusiCares, one of the largest artist resource organizations in the world, offers to artists. Specifically, Ms. Leff spoke about MusiCare’s grant program that helps artists who are struggling financially due to the global COVID-19 crisis. To qualify for this program, artists must have five years of music industry experience or be able to show proof of six commercially released tracks. Qualifying artists can request small-quantity grants to pay personal expenses, such as rent, medical care, and other necessities. So far, MusiCare’s grant program has supported over 18,000 artists during the COVID-19 pandemic and distributed $20 million in grant relief. In addition to this grant program, Ms. Leff spoke about how MusiCares looks out for the broader music community by offering educational seminars ranging from money management and tax tips for musicians to addiction and recover information.

Yudu Gray Jr., the co-founder of House Studio, then transitioned the panel from discussing overarching artist support organizations to how artists are handling the state of the music industry today. Through his music production company, House Studio, Mr. Gray has not only helped artists create masterful music productions, but he also concedes that he has helped artists with the “boring stuff” such as LLC registrations and accounting practices. However, this more holistic approach to providing foundational artistic and business services has allowed his artists to achieve global notoriety, as in the case of the Gramm–winning artist Logic. Mr. Gray then discussed his firsthand account of watching artists he works with struggle to pay rent and access other necessities because of the COVID-19 global pandemic. He sees that technology and the music industry are trying to pivot to stay alive, which ends up leaving individual artists behind. Recognizing this inequity, Mr. Gray began to look for ways to help artists get money to finance their projects. This search resulted in House Studio connecting with technology companies like Apple and Amazon to help artists’ projects get funded. For example, Mr. Gray spoke generally of an upcoming project where artists could pitch music video ideas to an undisclosed technology company that would fund the project without demanding rights. The only catch is that the content the technology company funded would be exclusive on its platform for a period of time.

Erik Philbrook from the performing rights organization American Society of Composers, Authors and Publishers (ASCAP) rounded off the panel by providing artists with tips on how they can get compensated for their work. First, Mr. Philbrook emphasized that artists need to register their music properly so that ASCAP and other royalty distributors can identify and compensate artists for their works. Second, he noted that many artists are not collecting their full amount of performance royalties because they only register with performing rights organizations as writers. Mr. Philbrook explained that unless an artist has a relationship with a publisher, the artist herself needs to register as both a writer and publisher with her performing rights organization so that she can receive all of the performance royalties she is due. Finally, Mr. Philbrook wanted to publicize that ASCAP also supports artists with educational materials, seminars, and conferences to teach artists on how to navigate the nuances of the music industry.

CLOSING REMARKS

CPIP Executive Director Sean O’Connor closed the conference by expressing how pleased he was with how smoothly the conference operated and thanking everyone involved in making this conference possible. Prof. O’Connor provided special thanks to the CPIP team, including Prof. Sandra Aistars, Prof. Devlin Hartline, CPIP Deputy Director Joshua Kresh, Kristina Pietro, and Mary Clare Durel, for their phenomenal work behind the scenes. Additionally, Prof. O’Connor acknowledged the financial and general support of the conference’s sponsors, in particular the Recording Industry Association of America (RIAA) and Mitchell Silberberg & Knupp LLP.

Prof. O’Connor then invited artists, academics, and anyone else to join CPIP next year in a follow-up conference that he anticipates will be themed “Rebuilding the Music Ecosystem.”

Written by , a graduate of Boston College Law School and Founder & CEO of Timshel Inc., a music fintech company that provides data-driven cashflow solutions to musical artists in Los Angeles, California. This is the third of three posts summarizing the three-day conference that was held online from George Mason University Antonin Scalia Law School on September 9-11, 2020.

Reposted with permission from the author. Originally published on

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The Evolving Music Ecosystem Conference: Day Two Recap /osgoode/iposgoode/2020/10/08/the-evolving-music-ecosystem-conference-day-two-recap/ Thu, 08 Oct 2020 16:41:31 +0000 https://www.iposgoode.ca/?p=35963 The post The Evolving Music Ecosystem Conference: Day Two Recap appeared first on IPOsgoode.

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On September 9-11, 2020, the Center for the Protection of Intellectual Property (CPIP) hosted conference online from George Mason University Antonin Scalia Law School in Arlington, Virginia. The conference featured a keynote address by singer, songwriter, and author Rosanne Cash.

This unique conference continued a dialogue on the music ecosystem begun by CPIP Executive Director Sean O’Connor while at the University of Washington School of Law in Seattle. In its inaugural year in the D.C. area, the conference aimed to bring together musicians, music fans, lawyers, artist advocates, business leaders, government policymakers, and anyone interested in supporting thriving music ecosystems in the U.S. and beyond.

SESSION 3: WHAT IS THE SCOPE OF A MUSICAL COMPOSITION?

Music copyright is unusual in that it can consist of two separate kinds of registered works. Musical compositions are the underlying song, most easily thought of in terms of notated sheet music. Sound recordings are particular performances captured in a recording. This panel focused on current hot topics in the composition rights. Panelists considered: how to determine the scope of composition for composers not fluent in written notation (including social justice aspects); whether and how juries should be used in assessing substantial similarity between works; new distribution and licensing models; whether it makes sense to distinguish compositions from sound recordings in today’s beats-forward studio-based composition approach for pop music; and AI compositions.

The panel included Prof. Robert Brauneis from the George Washington University Law School, Richard S. Busch of King & Ballow, Robert Clarida of Reitler Kailas & Rosenblatt, and Prof. Joseph Fishman from Vanderbilt University. The panel was moderated by CPIP Executive Director Sean O’Connor.

Robert Brauneis started the panel by clarifying that unlike the modern U.S. copyright landscape, the Copyright Act of 1909 required artists to deposit their compositions with the U.S. Copyright Office in the form of music notation to receive federal protection. If the artist submitted only a “lead sheet” with the lyrics and melody, the federal copyright protection was limited to what was in the lead sheet. However, after the passing the 1976 update to the U.S. Copyright Act, artists could deposit sound recordings instead of lead sheets, thereby providing protection for any musical elements in the entire recording. Prof. Brauneis then noted that the courts have regularly identified that the 1976 Copyright Act is retroactive. This means that artists with sound recordings made before 1972 could deposit their sound recordings and receive broad federal copyright protections in their work. This had a big implication because it allowed portions of a sound recording that may not have been notated in a lead sheet to receive copyright protection. This offered artists a broader set of rights in their music, which he argues is much more representative of how we perceive music rather than by the limited notations of lead sheets.

Richard Busch then used Prof. Brauneis’ presentation on the implications of offering copyright protections to sound recording instead of limited lead sheets to transition into a conversation about the notorious Williams v. Gaye lawsuit. Also known as the “Blurred Lines” case, it concerned whether Pharrell Williams and Robin Thicke’s “Blurred Lines” infringed the classic Marvin Gaye song, “Got To Give It Up.” The Blurred Lines case, which Mr. Busch litigated on behalf of the Gaye estate, furthered copyright jurisprudence by cementing that some combination of musical elements—even a unique combination of uncopyrightable elements—can maintain an infringement action. And to provide clarity and closure for those in the audience who did not follow the case, Mr. Busch explained how a similarly placed parlando present in both songs may have brought about the victory for the Gaye estate.

Robert Clarida then returned the conversation to the implication of allowing a sound recording to be deposited with the U.S. Copyright Office. Mr. Clarida noted that lead sheet deposit copies generally leave out many of the characteristic elements of songs, such as the guitar solo in “Hotel California” by the Eagles. To emphasize the importance of allowing copyright protection to exceed the lead sheet, Mr. Clarida highlighted how the strict observation of a lead sheet affected the Skidmore v. Led Zeppelin lawsuit. There, Led Zeppelin was sued for copyright infringement due to a piece that allegedly had similar elements to their megahit “Stairway to Heaven.” However, since Led Zeppelin had only deposited a lead sheet instead of the sound recording, the court remained ignorant about the true aspects of the song embodied in the sound recording. Consequently, the court did not consider the “undeposited authorship,” as Mr. Clarida put it, which could have resulted in an entirely different ruling.

Prof. Joseph Fishman turned the panel towards defining the scope of actionable similarity in copyright infringement cases. He recognized that this was a particularly interesting issue in the Blurred Lines case because it did not concern the top-line melody. Prof. Fishman explained that the earliest infringement lawsuits focused almost exclusively on whether there was a misappropriation of the top-line melody. However, there has been a modern trend of expanding protection to any combination of identifiable musical elements, as evinced by the Blurred Lines court. Prof. Fishman then went on to note that this modern shift in copyright jurisprudence increases the cost and complexity of litigating infringement cases because now they require expert testimony and jury verdicts.

KEYNOTE LUNCH / FIRESIDE CHAT

Singer, songwriter, Grammy winner, and best-selling author Rosanne Cash gave the keynote fireside chat from her home in New 91ɫ. Ms. Cash is a devout artist advocate and a friend of CPIP, and she has testified to the U.S. House of Representatives on behalf of artists. She is also a major proponent of the Artist Rights Alliance organization.

Prof. Aistars opened the conversation by asking Ms. Cash about her personal music ecosystem. “I don’t ever think about it being all about me,” she responded. Ms. Cash believes the music ecosystem is about “provid[ing] work for each other” and that it relies on flight attendants, audio engineers, bus drivers, background vocalists, and all other tangential participants to function. She finds that everyone in the music ecosystem is family because they all speak the same language and inspire one another. As for her personal music ecosystem, Ms. Cash expressed her gratitude for all of her support—from road crews to studio assistants—and for the devotion of her fan base. However, her music ecosystem’s nucleus centers around her “in-house” producer, co-writer, sound engineer, and husband, John Leventhal.

Highlighting the expanse of Ms. Cash’s definition of what the music ecosystem includes, Prof. Aistars then queried Ms. Cash about what she thinks is the most important element for building a thriving creative community. Ms. Cash emphasized that “support for the arts is key.” She expressed her frustration with how quickly public schools have cut funding for the arts, thus demolishing the foundational support system of creative young students. Ms. Cash’s concern is that while schools are willing to provide support for students who are inclined to pursue math and science, there is a lack of educational support and nourishment for those with creative dispositions. This disparity contributes to a discounting of the arts in the public’s mind and stifles innovation in the American arts.

Ms. Cash also noted that a thriving creative community cannot survive if that community does not support its venues for showcasing the arts as well as those who create it. As small music venues continue to close due to COVID-19’s effective moratorium on in-person live music, Ms. Cash believes the creative communities that rely on those venues will disappear with them. She then stressed the importance of the Artist Rights Alliance and other nonprofit artists’ organizations that provide financial support and health care to artists. She also said that federal and state funding is crucial if artists are to survive this global pandemic. Ms. Cash brought attention to France’s recent budget allocation of $2 billion for supporting artists during the pandemic. She is disappointed that while U.S. legislators have supported other service industries, they are unwilling to put the same level of support towards protecting those who enrich and drive our American culture. As Ms. Cash put it, “We are in the service industry–we serve the heart and soul.”

Prof. Aistars then transitioned the conversation to the lighter subject of Ms. Cash’s creative process—specifically, as a songwriter and best-selling author, if her process varies depending on whether she’s writing prose or lyrics. Ms. Cash prefers to create lyrics in the comfort of her kitchen, which is supplied with a guitar, microphone, and digital audio workstation. Also, she finds that regular breaks are necessary for her creative process when writing songs. Ms. Cash notices that many times, after she’s taken a break to go to the store or run an errand, the song has found a way of finishing itself when she picks the guitar back up.

In contrast to the loose framework of Ms. Cash’s songwriting, she admitted that when writing prose, she appreciates having a word count, a defined topic, and a due date. She believes that song structure is like a house with blueprints: the rhyme scheme and each verse are built together in an existing structure. However, when writing prose, the piece’s blueprint is not as apparent, so she finds it easier to get lost. Consequently, Ms. Cash finds subtle comfort in the certainty of having defined parameters to guide her construction of the prose.

Prof. Aistars then recounted when Ms. Cash testified in front of the House Judiciary Committee on behalf of artists in 2014, which reference gave way to a discussion on Ms. Cash’s further artist advocacy work with the (ARA). The ARA seeks to achieve fair treatment and compensation for working musicians, performers, and songwriters online through advocacy work and by promoting its “.” Ms. Cash, who sits on the organization’s board, feels passionately about getting the voice of the ordinary musician heard. Although, she readily admits that she is “planting a garden I will never see bloom.” Ms. Cash discussed how she is particularly passionate about having the Artist Rights Alliance help artists receive attribution for their work, prevent politicians and other groups from using an artist’s work to promote their ideologies, and achieve just compensation.

In line with Ms. Cash’s conversation about politics, Prof. Aistars then asked her about how important the First Amendment is to her. Ms. Cash said that as a person who is loudly anti-gun violence and a regular public commentator on politics, she thinks the First Amendment is a crucial part of being an American. Ironically, she mentioned how many people expect musicians to not be involved in political discourse and instead “shut up and sing.” And while pointing out that this request is “anatomically impossible,” Ms. Cash emphasized—referring to a statement by American musician Tom Morello—that she “did not set down my First Amendment rights when I picked up my guitar.” She believes art is supposed to make the audience uncomfortable and arouse feelings, so artists should be encouraged to voice opinions that challenge the political beliefs of others.

Finally, Prof. Aistars concluded the keynote by asking about how Ms. Cash has been affected by the COVID-19 crisis and what others can do to help artists during these difficult times. Ms. Cash reflected on how interesting it is that COVID-19 shutdowns have made her “miss what I wanted to lose.” She discussed how before the pandemic she regularly missed home while touring because the road can be quite taxing. Also, her first true love is songwriting, which she finds difficult to do on tour. However, her long absence from touring due to the global pandemic has made her realize how much she misses connecting with her fans, working with the tour crew, and performing.

Ms. Cash encouraged everyone listening to the fireside chat to not take the message of this conference lightly. She stressed that music communities and ecosystems around the nation and the world are hurting, but there are certainly things people can do about it. She encourages people to donate to organizations that support independent artists directly, such as MusiCares and the Artist Rights Alliance. Also, to support music communities themselves, people need to donate to independent creative venues so that artists have a place to feature their work once people can return to public spaces and concerts. Finally, and most importantly—buy music! Ms. Cash says that if we are going to build a sustainable music industry for everyone, people need to move away from the free tiers of streaming platforms.

Ms. Cash ended the fireside chat with humbling words of appreciation for everyone involved in The Music Evolving Ecosystem conference and by showing a music video of her song “We’re All in This Together.” John Paul White and Ms. Cash wrote this song and made this video during the pandemic shutdowns, and all proceeds from the video go to the Music Health Alliance to help artists receive health care.

SESSION 4: THE NEW ROLE OF RECORD LABELS & PLATFORMS

From MP3s to YouTube to Spotify, the way we listen to music in the digital age has changed considerably over the past twenty years. At a time when physical copy records and full-length albums have been replaced by the streaming single, what role does a record label play? And as traditional lines between creator, copyright owner, and distributor continue to blur, how will labels and streaming services work together to ensure that artists are appropriately compensated and incentivized? This panel, moderated by Prof. Loren Mulraine of Belmont University College of Law, explored recent developments in copyright law as they apply to the music industry and looked ahead to how music ecosystems will evolve in the coming years.

Mitch Glazier of the Recording Industry Association of America (RIAA) began the panel by highlighting that while the COVID-19 crisis has created a sudden shift in the performance and monetization of music, this is not the first time record labels have met the challenges of a seemingly overnight evolution of the music industry. Mr. Glazier explained that over the last twenty years there have been five major inflection points marking evolutionary bursts of the music industry. It began with a Supreme Court victory in MGM Studios v. Grokster that brought certainty to the prospect of legal recourse for rights owners in the lawless landscape of peer-to-peer music piracy of the early 2000s. This was followed by Apple’s iTunes, the first secure, consumer-friendly online music distribution platform. Then, as the 4G internet revolution made mobile music streaming feasible, record labels introduced an entirely new catalog licensing dynamic when they brought Spotify to the United States. Finally, Mr. Glazier identified that the music industry is in the midst of establishing its most recent inflection point, which involves social media. To achieve this inflection point, record labels will need to create a licensing regime with social media platforms that is beneficial to technology companies and profitable for artists.

Mark Baker from Warner Music Group (WMG) then discussed how modern record labels are evolving to fit the contours of this rapidly expanding music landscape. Baker identified that record labels have always amplified the creativity of artists by providing the marketing, licensing, and career development expertise of their staff. And while modern artists have unprecedented access to online distribution and licensing opportunities, putting together a comparable artist development team piecemeal to service an artist’s career is no easy feat. Mr. Baker finds that traditional full-service record label agreements remain essential for many artists, but the needs for other artists have evolved with music technologies. WMG recognized this a number of years ago, which caused the label to create the a la carte artist service company, Alternative Distribution Alliance (ADA). Unlike a full-service record agreement, ADA allows independent record labels and artists to select individual creative services to leverage WMG’s global infrastructure. Mr. Baker suggested that ADA’s a la carte model shows WMG’s commitment to keeping pace with music technology.

Garrett Levin of Digital Media Association (DiMA) then expanded the scope of the conversation from how labels are evolving to digital technology to how artists’ careers can shift to utilize the power of streaming technology. Mr. Levin explained that while record income has dropped dramatically since the late 1990s, streaming revenue and subscriber numbers have been increasing at a promising rate. In addition to the prospect of increased record income, artists receive a multitude of other benefits when they embrace streaming technologies. Specifically, artists have more access to fans and granular consumption behavior data that will change how artists create and operate their business. Mr. Levin went on to suggest that artist-to-fan relations will become closer than ever through this technology’s ability to create custom music programming and connect with fans through their mobile devices.

In contrast to Mr. Levin’s unbridled enthusiasm for digital technologies, Prof. Larry Miller from NYU Steinhardt painted a more cautious picture of streaming. Prof. Miller highlighted that streaming technology’s ability to give consumers access to millions of artists only makes it more difficult to rise above the noise. He insisted that theoretical discoverability in a vast pool of artists is not the same as practical discoverability that will allow artists to create sustainable music careers. Additionally, Prof. Miller suggested that the low royalty rates of streaming have converted music into a consumption business plagued by sales plateaus. These sales plateaus occur because low revenue rates, coupled with the physical consumption limitations of fans, require artists simultaneously to pursue a variety of revenue sources, such as streaming, merchandise, and vinyl. Prof. Miller notes that this is where the expertise, infrastructure, and connections of record labels provide the most value to artists. Finally, he emphasized the importance for music industry participants and students to have a basic understanding of data science to survive in our data-driven music industry.

Written by , a graduate of Boston College Law School and Founder & CEO of Timshel Inc., a music fintech company that provides data-driven cashflow solutions to musical artists in Los Angeles, California. This is the second of three posts summarizing the three-day conference that was held online from George Mason University Antonin Scalia Law School on September 9-11, 2020.

Reposted with permission from the author. Originally published on

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The Evolving Music Ecosystem Conference: Day One Recap /osgoode/iposgoode/2020/10/08/the-evolving-music-ecosystem-conference-day-one-recap/ Thu, 08 Oct 2020 16:38:09 +0000 https://www.iposgoode.ca/?p=35961 The post The Evolving Music Ecosystem Conference: Day One Recap appeared first on IPOsgoode.

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On September 9-11, 2020, the Center for the Protection of Intellectual Property (CPIP) hosted conference online from George Mason University Antonin Scalia Law School in Arlington, Virginia. The conference featured a keynote address by singer, songwriter, and author Rosanne Cash.

The past year has seen major changes to the music ecosystem and the laws and policies integral to its viability. For example, while the Music Modernization Act (MMA) provided a much-needed update to the way artists’ creative contributions are recognized and supported in the digital age, debates over royalties, infringement, piracy, and new distribution models remain. Diverse issues surrounding ownership and control of data, music festival arrangements, and the nature of artists’ roles in the gig economy have also made headlines. Despite encouraging steps forward and seemingly unlikely partnerships, arriving at a place of balance in music—where respect for artists and others on the music production side is just as important as facilitating innovative models for listener access—requires more work and cooperation.

This unique conference continued a dialogue on the music ecosystem begun by CPIP Executive Director Sean O’Connor while at the University of Washington School of Law in Seattle. In its inaugural year in the D.C. area, the conference aimed to bring together musicians, music fans, lawyers, artist advocates, business leaders, government policymakers, and anyone interested in supporting thriving music ecosystems in the U.S. and beyond.

OPENING REMARKS & INTRODUCTIONS

CPIP Director of Copyright Research and Policy Sandra Aistars opened the conference by noting the aptness of coming together (albeit online) for music during a time when the global COVID-19 crisis has shut down much of the world. Prof. Aistars highlighted how music is a tool for eliciting solidarity during difficult times, and our current global pandemic is no exception. Prof. Aistars described how earlier this year, Italians banded together to play with and for each other from the balconies of their homes during the peak of their COVID-19 national lockdown. She found this brought home the importance of nourishing the music ecosystems that, in turn, nourish our communities.

Prof. O’Connor also wanted to emphasize that The Evolving Music Ecosystem would not be your garden-variety music law and policy conference. Where many music conferences fall into the mold of offering panel after panel of esoteric copyright infringement discussions, Prof. O’Connor wanted this conference to take a holistic approach that covered the entire music ecosystem. And while admitting there would be panels covering the copyright infringement landscape, his intention for this conference was to delve deep into pressing issues for working songwriters, performers, musicians, and other music stakeholders. By aligning with the broader music ecosystem, he hoped this conference would empower not just citywide music ecosystems, but also those spanning the national and the globe.

SESSION 1: IMPLEMENTING THE MUSIC MODERNIZATION ACT

The Music Modernization Act (MMA) is a revolutionary legislative bill that was the result of complex negotiations and compromises among songwriters, publishers, record labels, digital service providers (DSPs), and other music industry stakeholders. The MMA, among other things, set the framework for a new composition database and blanket mechanical licensing system, and designated the Mechanical Licensing Collective, Inc. (MLC) to administer it. Although the MMA was enacted in 2018, discussions of how this licensing system will be implemented continue to be prominent in music industry and academic circles alike. With the MLC beginning to administer blanket licenses under this new licensing regime on January 1, 2021, there is no better time to discuss the implementation of this legislation.

The panel included Danielle Aguirre from the National Music Publishers Association, Adam Gorgoni from the Songwriters of North America, Lisa Selden from Spotify, and Regan Smith of the United States Copyright Office. The panel was moderated by Prof. Mark Schultz of the University of Akron School of Law.

Danielle Aguirre set the stage for the panel by offering background information about how the MLC will administer mechanical licenses as a blanket license and how revolutionary this is in light of the old system of individual licensing. Ms. Aguirre explained that while digital service providers (DSPs), such as Spotify and Google, will fund the MLC, it will be the publishers and songwriters that will actually govern the administration of their royalties. She hopes this separation of funding and administration will align the incentives of DSPs and creators, as well as offer trust and transparency for all music stakeholders. Ms. Aguirre believes that the data quality initiatives and software the MLC is developing internally will allow the MLC licensing system to run as smoothly as possible when it launches at the end of this year.

Regan Smith then offered her perspective from the U.S. Copyright Office. Ms. Smith explained that the MMA created criteria for the MLC to operate, but it also went on to grant the Office discretion to regulate issues or schemes that may arise during the MLC’s implementation that were not contemplated by the MMA drafters. Consequently, the Office has been working with all music industry stakeholders to ensure the MLC comes together smoothly. In addition to the regulatory function, Ms. Smith said that the Office focuses on providing educational programs and materials to educate artists and the public about the MLC.

Ms. Smith was followed by songwriter and Songwriters of North America (SONA) founder Adam Gorgoni, who discussed how the previous licensing regime was unsustainable for artists, spoke on the importance of educating artists about music metadata, and provided insight into how SONA represented artists in the MMA negotiations. Reflecting on the MMA negotiations, Mr. Gorgoni recognized that the legislation was not perfect and that tradeoffs were made, but he was confident that the most important points for artists were included. Ultimately, Mr. Gorgoni found one phrase regarding the creation and negotiation of the MLC to be the most applicable: “Don’t make the perfect be the enemy of the good.” This mantra resonated with rest of the panelists.

Lisa Selden then offered her opinion about the negotiations and implementation of the MMA through the perspective of the licensees. In addition to her work at Spotify, Ms. Selden represents Spotify on the board of directors of the Digital Licensee Coordinator (DLC), which is a nonprofit entity that coordinates and represents the interests of DSPs. The DLC board members include representatives from other prominent DSPs, such as Apple, Amazon, Google, and Pandora. Ms. Selden emphasized the importance of the DLC in relation to the MLC, but she also discussed the challenges of creating a single voice from the diverse motivations of each individual digital DSP.

SESSION 2: THE CHANGING NATURE OF SOUND RECORDING RIGHTS

The sound recording category of music copyrights has been more limited in some ways than the composition category. Sound recordings received no federal protection before 1972 and then afterwards that protection did not apply to terrestrial radio broadcasts. The recent Music Modernization Act (MMA) extended a measure of protection to pre-1972 sound recordings, while proposed legislation would allow sound recording owners to seek compensation from terrestrial radio stations for public performances of their works similar to the system for digital webcasters and streaming. The panel, moderated by Prof. Steven Jamar of Howard University School of Law, discussed the current state of sound recordings, their curious history under U.S. law, and their future in the digital streaming age.

Producer Mikael “Count” Eldridge of Vertebrae Productions opened the panel with a sobering call for an artist-first focus to music industry discourse. He explained how the media and music industry often marginalizes the financial struggles of individual creators when it focuses purely on the macroeconomics of the touring and recording businesses. He believes this flaunting of aggregate music statistics—driven by the top 1% of artists—misleads the public as to the status of artists’ livelihoods and that this in turn perpetuates the myth that the artists on streaming services could earn a living by simply selling t-shirts and touring. Mr. Eldridge stressed that if we cannot increase streaming subscription fees to increase royalty rates for artists, we will lose the music and voices of thousands of independent artists who provide invaluable political and cultural contributions. He concluded by highlighting that many of these issues for independent artists are tackled in his forthcoming documentary , for which he is currently curating a lecture circuit tour.

Agreeing with Mr. Eldridge’s push for artist-first discourse, SoundExchange’s Brieanne Jackson gave a brief history of how her organization is empowering the lives of artists with its collection and distribution of digital performance royalties. Ms. Jackson then emphasized how SoundExchange not only fuels the lives of modern artists but was also instrumental in getting legacy artists compensation for their pre-1972 sound recordings. Before the MMA was enacted in 2018, artists prior to 1972 received no federal copyright protection or statutory compensation for their sound recordings. However, due in part to SoundExchange’s advocacy, pre-1972 sound recordings now receive protections under the MMA. Today, SoundExchange continues to push for artist sound recording rights in the U.S. by advocating for the Ask Musicians for Music Act (AM-FM Act), which was introduced to the U.S. House of Representatives in late 2019. Ms. Jackson explained that the AM-FM Act would finally provide sound recording rights owners with compensation when their music is played over terrestrial radio.

Attorney Eric Schwartz of Mitchell Silberberg & Knupp carried forward Ms. Jackson’s conversation of pre-1972 sound recordings by diving into how Congress came to include federal protections in the MMA for pre-1972 recordings, as well as its implications for artists. Mr. Schwartz explained that before the MMA, pre-1972 sound recordings were only protected by state and common law instead of federal law. This meant that while pre-1972 sound recordings did not generate digital performance royalties from streaming companies, rights owners had hoped they could use their state rights to pursue more effective infringement actions for online piracy directly, rather than through the broken notice-and-takedown and safe harbors regime of the Digital Millennium Copyright Act (DMCA). However, once the Second Circuit held that the DMCA safe harbors applied to pre-1972 recordings, artists and policymakers began to pursue a digital performance right for rightsholders, which manifested in the MMA.

Mr. Schwartz next highlighted that recent legislation in Canada, as a result of the United States-Mexico-Canada Agreement (USMCA), and a judgment by the European Court of Justice will provide U.S.-based artists the same rights (e.g., national treatment) that Canadians and EU citizens enjoy in their own territories resulting in significant new payments to American producers and performers from these territories. Lastly, he mentioned that the U.S. Copyright Office has proposed a new rule to allow certain artists to register entire albums of up to twenty songs at once, which will greatly cut down the expense and headache of registering copyrights for multiple works.

The final panelist was Todd Dupler of the Recording Academy, who discussed the implications of the ѲѴ’s new “willing-buyer-willing-seller” standard for rate court proceedings and the introduction of the AM-FM Act. Mr. Dupler explained that before the MMA, the standard used to set the statutory royalty prohibited judges from considering what a licensee might pay for a license in the open market. As a result, this standard prevented artists from receiving just compensation for their work. However, with the ѲѴ’s new standard, judges can consider how the fast-paced technology market values music and what a potential licensee may be willing to pay for using music. Mr. Dupler concluded with highlighting the Recording Academy’s advocacy of the pending AM-FM Act, which would provide artists with an additional source of revenue by creating a performance right in sound recordings for terrestrial broadcasts. Importantly, this sound recording performance right would require the radio industry to finally compensate recording artists for their music. However, Mr. Dupler stressed that if artists are going to pass this transformative legislation, they and the public need to “speak out and speak up.”

Written by , a graduate of Boston College Law School and Founder & CEO of Timshel Inc., a music fintech company that provides data-driven cashflow solutions to musical artists in Los Angeles, California. This is the first of three posts summarizing the three-day conference that was held online from George Mason University Antonin Scalia Law School on September 9-11, 2020.

Reposted with permission from the author. Originally published on

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The Future of Music Publishers’ Rights in the US and UK /osgoode/iposgoode/2019/05/22/the-future-of-music-publishers-rights-in-the-us-and-uk/ Wed, 22 May 2019 18:57:28 +0000 https://www.iposgoode.ca/?p=3472 Recently, I sat in on a well-attended speaker event at Cassels Brock. The first speaker at the event was Erich C. Carey, Vice President and Senior Counsel of the National Music Publishers’ Association (NMPA), which is the trade association that represents American music publishers and their songwriting partners. The NMPA often advocates for music publishers […]

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Recently, I sat in on a well-attended speaker event at Cassels Brock.

The first speaker at the event was Erich C. Carey, Vice President and Senior Counsel of the National Music Publishers’ Association (NMPA), which is the trade association that represents American music publishers and their songwriting partners.

The NMPA often advocates for music publishers and songwriters, and the focus of Mr. Carey’s presentation was their work leading up to, and a general update regarding the US Music Modernization Act, with particular emphasis on how the MMA will change mechanical licensing.

The second speaker was John Phelan. Mr. Phelan is the director general of The International Confederation of Music Publishers, the trade association which represents the interests of the music publishing community internationally. Constituent members include music publishers’ associations from Europe, Middle East, North and South America, Africa and Asia-Pacific. One of ICMP's stated missions is to increase copyright protection internationally. The focus of Phelan’s presentation was the European Copyright Directive, and specifically article 13, the so-called “value gap” provision.

The Music Modernization Act

Carey explained that the MMA combined three previously separate bills-- The Classics Act, the AMP Act, and the Music Modernization Act. The bill passed unanimously through both the senate and house of representatives, and was passed in September 2018. Carey’s talk was focused on how the MMA would change mechanical licencing.

Mechanical Licensing - Background

Mechanical rights to a piece of music are those that stem from the mechanical embodiment of the piece.

According to Carey, mechanical licensing was put into place to compel licensing for a set royalty to piano players in cinemas.

The US Copyright Act codified this in s.106, while s.115 instated the copyright royalty board which has continued to be the body that adjusts the standard licensing fee.

The Copyright Act is now out of date in some ways. In the current era of streaming services, there are often issues matching the mechanical rights owner to the song. Under the Copyright Act, if there was a matching issue the streaming service would simply have to send a notice of intent to use the music to the copyright office, and would not have to pay until the true owner was identified.

While this would appear to be a sensible approach, a few years ago, the copyright office received 60 million notices of intent. This completely overwhelmed the system and effectively allowed the streaming services to use music without paying.

Proponents of MMA believe it can provide a solution

The MMA is in part meant to allow streaming services to pay rights-holders in a more straight-forward, streamlined way. The MMA creates a mechanical licensing collective. The collective will be run by a board of directors representing the music publishing industry, and will include three committees, including an Operations Committee, Unclaimed Royalties Committee, and Dispute Resolution Committee.

Streaming services with unmatched music will have to pay the appropriate royalty to the collective. The collective will then hold the money until the rights-holder can be found. The collective will also allow blanket licences, allowing streaming services to licence an entire body of work and not be concerned about outstanding royalties owed.

Costs associated with enacting the MMA

In accordance with the MMA, streaming services will pay for the costs associated with the MMA infrastructure.

The services have agreed to taking on the costs because there will be clear rules where there were none before, and so with the proper infrastructure in place they will now be protected from copyright infringement claims if they follow proper procedure.

Carey sees the MMA as a marketplace solution, which has allowed the typically slow-changing law to be specifically tailored to a rapid technological advancement.

He made it clear that there is still much to do regarding outlining the structure and technical implementation of the MMA, and that policy makers and industry members have a lot to do before the MMA’s January 1st, 2020 launch date.

European Copyright Directive

Mr.Phelan began his presentation at this point to discuss his area of expertise. The European Copyright Directive was adopted on April 17, 2019. Its purpose is to create better protections for rights holders. Mr. Phelan focused his talk on what is known as the “value gap” provision, or Article 13 of the directive.

Many services earn a significant portion from content that they do not pay for, and which they use without fear of liability.

Mr. Phelan used YouTube as an example -  until the directive was proposed, YouTube was covered under the Safe Harbour clause, which exempted services that were technical, automatic and passive from copyright laws.

As a result, YouTube was paying 20x less per user per year than what they should have been.

The directive aims to close the gap between the money services gain from the artists’ work and the money the artists see. Article 13 eliminates many exemptions, including the one that YouTube was originally covered by.

Under the new directive, services that have been available in the EU for more than three years or have a gross revenue over €10 million will be held liable for copyright infringements unless they can demonstrate taking certain steps to mitigate the issue.

They must show that they have made best efforts to get permission from the copyright holder and made best efforts to ensure that material without permission was not made available, and that they have acted quickly to remove any infringing material.

Reaction to Article 13

Though Article 13 may seem relatively straightforward, it has been a topic of .

Movements such as and #DeleteArticle13 are concerned that the new rules will be a censorship of sorts, causing services to block parody videos, live stream gaming, and other content.

Many are concerned about what they perceive to be restrictions on their online freedoms.

However, proponents of the directive state that it is a long-awaited modernization of the law, and that it will help protect artists. Members of the European parliament appear to agree as the directive has been passed.

Transposition of European Copyright Directive

The next step, Mr. Phelan said, is transposition. This means that within two years of the date the directive was published in the - May 17, 2019, - every country in the EU must enact laws that comply.

The European Commission will then examine each country’s enactment to make sure that it complies with the shared directive.

Transposition comes with its own set of challenges, as different countries have different ideals about the internet and copyright.

Staying up to date on European Copyright Directive

As the directive is transposed across the EU, Mr. Phelan suggests following the by Eleonora Rosati for insightful and up to date commentary.

Written by Rachel Marcus, IPilogue Editor and JD Candidate at Osgoode Hall Law School.

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