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Re-Introduction of Fair Play Fair Pay Act

WASHINGTON – Today Representatives Jerrold Nadler (D-NY), Marsha Blackburn (R-Tenn), John Conyers (D-Mich), Darrell Issa (R-CA), Ted Deutch (D-Fla), and Tom Rooney (R-Fla) introduced The Fair Play Fair Pay Act designed to help music creators get paid fairly when their music is played across various platforms, including AM/FM radio, SiriusXM and others. Below is a comment on the bill from RIAA Chairman & CEO Cary Sherman.

“This bipartisan bill helps create a more level playing field when music is played on various platforms. By doing away with Big Radio’s subsidy that rips off artists and labels, helping streamline producer payments, fixing the pre-’72 loophole to help legacy artists get paid, and finally bringing SiriusXM’s antiquated rate paid to music creators into alignment with its competitors, this bill is much-needed legislation made to fit today’s modern music industry. We thank Reps. Nadler, Blackburn, Conyers, Issa, Deutch, and Rooney for their leadership on these important issues.”

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Exclusive Deals Have Reached Its Limits

Major labels are pushing for the end of exclusive deals with streaming services as they are quickly realizing such a practice hinders the potential profit of their artists’ biggest albums and creates incentive for brand name artists to no longer renew their contracts.

A New Economy

Since their launch last year, streaming services Tidal and Apple Music have been paying record labels for the exclusive rights of their music to entice new subscribers. Apple Music pays artists such as Drake, Pharrell Williams, and Future large amounts of upfront money while Tidal gives an ownership cut to artists like Kanye West, Beyonce, and Rihanna — all in exchange for promotion of their platform to compete in a Spotify-dominanted industry.

It has proven to be a successful marketing strategy for both companies, with Apple Music and Tidal generating a combined total of about 20 million new subscribers just in the past year.

Artists always utilized their labels for distribution and, indeed, were bound by an exclusivity clause in their recording contract. As streaming services have taken over the distribution of music, they have reached out to big name artists. Such artists have enough power to sway their labels and cut their own deals. It is leading to a shift in power in the industry, determining a turf war on how music will be released and heard and leading to more cavalier attitude by top artists towards the labels.

Label Distribution

2016’ s biggest three albums illustrate the waning influence of the labels in distribution. Earlier this year, Drake signed a $19 million dollar deal with Apple Music to promote their streaming service by offering his new album Views exclusively on their site for a one week period. During this week, Views was streamed more than 250 million times by users and sold over 1 million copies on iTunes. The album then continued to grow as it became available on multiple platforms such as Spotify and Tidal.

In August, Frank Ocean released his album Blonde exclusively on Apple Music and iTunes and grossed 276,000 equivalent sales while debuting at No.1 on Billboard’s 200 chart. It was later expanded to multiple streaming platforms as well. In April, Beyonce released Lemonade, which grossed 653,000 album sales while also earning a No.1 spot on Billboard’s 200 chart. The album was later available via Apple Music as paid digital download only.

While major labels benefit from the sales of these albums, they don’t partake in the artists’ initial upfront fee from the streaming platform. This is true even when they are listed as the distributors, like Drake’s Views (distributed by Cash Money Records, owned by the Universal Music Group) and Beyonce’s Lemonade (distributed by Sony’s Columbia Records). But Frank Ocean’s Blonde was distributed through his own independent label, much to the chagrin of Universal Music: immediately after this exclusive release Lucian Grainge, Universal’s CEO, sent out an email to all branch executives of the company demanding the end of exclusive deals with streaming services. UMG, the world’s biggest music company, is the first major label to ban such deals, viewing the practice of restricting an album’s accessibility during its launch as detrimental to its bottom line. Drake, Taylor Swift, Kanye West, Coldplay are UMG artists as well.


It is easy to see that the conflict over first releases has the potential to unravel decades of standard music industry practice. UMG’s top artists, for instance, will have to decide what to do, and this is not an obvious choice. If they abide by the label they may be preempting the distribution of streamed music, the top dollar value in recorded music today. If they flock to the streaming services, they may have to jettison their relationship with the label and hurt the industry, for labels are in business of signing new acts from the proceeds they make from megastar releases.

The issue is also complicated for other reasons. Conceivably, breakaway artists could benefit substantially from upfront fees and higher royalty rates; however, such exclusivity deals could upset and turn away fans that do not have access to multiple platforms. The proposition could be a losing one for artists long-term.

Streaming distribution worldwide could be a concern too. Not every country has streaming services. In Japan, Germany, and France, three of the top five markets, the predominant format is still the CD. Labels have done well moving product across borders, and the Rest of World accounts for three-quarters of all the recorded music business. An online focus that ruins a label-artist relationship is not in the interest of the artist.

Competition for Exclusives

Another factor is intra streaming service competition for exclusives. Spotify has recently failed to promote music that was previously released exclusively through Apple Music and Tidal. When Spotify is the secondary release platform, the music is not likely to make its promotional playlists, top searches, or be featured content in the the site.

Two examples make the point, one by Katy Perry and the other by Frank Ocean. Perry’s single Rise released in July, hit number 11 on Billboard’s Hot 100 after being released exclusively on iTunes and Apple Music for one week and featured in NBC’S US Olympic coverage, then fell dramatically in rankings. It failed to appear on Spotify’s playlist, “Today’s Top Hits” as well as “New Music Friday” which are the service’s two biggest playlists with collectively ten plus million followers. The song didn’t appear on any Spotify-managed playlists until early August when it charted at No. 176 on Spotify’s “Global 200” playlist. Frank Ocean had a similar experience. After debuting Blonde exclusively on iTunes and Apple Music, it was then released on Spotify one week later, but it was nowhere to be found on featured playlists or advertisements.

For the labels, Apple Music is the lesser of two evils, because it places fewer restrictions on the terms of its exclusive deals than Spotify does. Spotify may have more subscribers but Apple is better because it does not do free music and uses ad supported services that can bring in more revenue to both the artist and the label. Drake and Frank Ocean, and their labels, were paid for the exclusivity deal. Beyonce and Adele went exclusive only with paid downloads, not streamed albums. Spotify involves its free service, not just its premium subscription service, in its exclusive deals.


Exclusives also encourage piracy, depriving potential monies to the original creators. This year, the IFPI (International Federation of the Phonographic Industry), reported that a third of Internet users rip streams, a 10% increase from 2015. In July, nearly a billion Internet users visited the top thirty stream-ripping sites. Earlier, a U.S. federal judge ordered pay $22 million in restitution to the RIAA (Recording Industry Association of America). The problem is becoming endemic, and mobile apps such as “TubePlayer” now target YouTube likely the most important music discovery site of them all. Even if action can be taken by YouTube if notified, this is cumbersome to do and likely a little and too late.


Overall, the exclusive rights crisis is reshaping an already fragmented industry. Label contracts are being rewritten. Top artists break with employers to suit themselves. Streaming services gain a promotional upper hand in the distribution of music. All of this is happening while consumers have more access than ever to tools that allow them to seize streamed product without paying for it.

If sense is to prevail, it must start at the top, with artists understanding the full implications of their actions. For them, as discussed in the article, what is good here and now may not last. Moreover, the old record label system helped independent artists, by taking from the rich, so to speak, and giving to the poor. Perhaps the day will come when the streaming services will invest in indie artists, but in the meantime their focus on exclusive celebrity releases hurts the labels and acts as a disincentive to the signing of new and untested talent.

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Songwriters vs. the DOJ

Federal law governs the licensing of music and songwriters collections. In particular, sound compositions that are broadcasted over the public airways or performed in commercial venues have to be licensed to compensate creators and their publishers. This is the law, and the right of ‘public performance’ is a key revenue source for music makers.

The bulk of performance income from song copyrights is collected in the US by two PROs (Performance Rights Organizations): ASCAP and BMI. Together, they generate about $2 billion dollars annually. Roughly half of that tends to go to songwriters and the other half to their assigned publishers. Other PROs, like SESAC and the newer Global Music Rights (GMR), capture a smaller market.

Broadcast networks, in radio and TV, prefer to buy music catalogs in bulk, rather than piecemeal. This allows them flexibility in their programming and avoids one-on -one negotiations for single compositions, which could be costly and time consuming. That is why the PROs exist: to negotiate collectively on behalf of musicians and their publishers for an entire catalog. For the longest time, the belief in the industry was that returns to creators were maximized with this arrangement for holding an entire catalog ensured a stronger bargaining power by the PROs and higher returns for everyone.

The principle has come into question recently, for some songwriters believe they are not getting market value for their compositions, especially when they are streamed. The rates paid to songwriters on a per stream basis are much lower than they used to be in the world of physical sales or downloads. Writers, and their publishers, which are affiliated with either ASCAP or BMI, are in a special bind. Writers and publishers are governed by anti-trust Consent Decrees that go back to the 1940s: they simply must accept that they operate under the umbrella of ASCAP and BMI and cannot pull out their music at will. This does not apply to the smaller PROSs, SESAC and GMR, for they are run for profit and do not fall under any such Consent provision.

Fractional Licensing

A year or so ago, some songwriters and their publishers approached the Department of Justice (DOJ) to petition a change in the law: they wanted to have fuller control of their compositions, pulling them out of the PROS here and there, so that they could license them on demand at a higher price. The DOJ rejected their request and instead insisted on a new way of licensing music.

In the past permissions to use a song had to be sought from every rights owner, so that if two writers of a song were affiliated with different PROS that didn’t stop ASCAP and BMI transacting the song with a network. As everyone dealt with ASCAP and BMI, working with the two PROS pretty much cleared the market. This so-called fractional licensing system of doing business was OK and accepted.

Now the DOJ asked for a new business modus operandi: the norm for transactions moving forward was declared to be a new full work, 100%, licensing system. If enforced, the new ruling would imply that the next time blanket licenses are routinely negotiated with the TV and radio networks by ASCAP and BMI representatives, they would only be able to vouch for those compositions that each PRO controlled fully.

The irony is that the DOJ is trying to facilitate music trading over the Internet, by spearheading a movement towards full rights ownership per song in one PRO. Digital companies and broadcasters like this, for it allows them to purchase rights on the fly at one stop. The problem for songwriters and their publishers is that the blanket licensing system, where the bulk of the PRO income is still made, was working very well anyway for most writers.

Even the select group of writers that wanted better terms for their streams and asked for a review of the Consent Decrees are completely opposed to the new ruling of the DOJ, because in their view it introduces far too many practical and bureaucratic complications and does not respect the collaborative nature of songwriting, where you cannot force a BMI songwriter to join ASCAP for a particular song. And what if the next collaboration is with another BMI writer?


This suggests that the ruling of the DOJ, well intended as it was, needs more reflection. A new interest group has arisen in the last year that is challenging the DOJ in court as of September. It is based in Los Angeles and its membership of over two hundred songwriters is growing rapidly. It goes under the name of SONA, which stands for Songwriters of North America. For SONA, the 100% licensing obligation both diminishes and encumbers the private contractual rights and copyright interests of songwriters and composers.

In particular, SONA has sued the U.S. Department of Justice for a denial of the Fifth Amendment right, which requires that the “due process of law” be part of any proceeding that denies a citizen “life, liberty, or property” — in this case the self determination of copyright property. This is because 100% licensing that it opposes allows a co-owner of an undivided interest in copyright property to grant a nonexclusive license to a third party for use of the whole parcel without the consent and potentially over the objection of other co-owners.  A co-owner relying on this rule also assumes the obligation of not licensing copyrights at a rate that constitutes an ‘economic waste’ of the intellectual property.

Another aspect of SONA’s lawsuit turns on presumed violations of administrative law. Indeed, the Administrative Procedure Act of 1946 (APA) states that federal agencies should not make rules or policies that are in excess of their power to enforce them, that are arbitrary and capricious, and, finally, that are adopted without appropriate procedural safeguards. Given the quick backlash from the songwriting and publishing community, and the lack of DOJ guidelines for implementing what seems to be earth changing prescriptions for clearing performance music rights, SONA’s challenge resonates. 

There are more details to SONA’s case. SONA calls attention to the 100% obligation because they believe it will have a lasting and detrimental impact on the business and networks of songwriters. While it denies songwriters their right to divide and separately own and exploit the works they create with others — for SONA, this is a clear violation of the Copyright Act — it also deprives writers and composers of the ability to select the PRO they prefer to be represented by in their song shares.

Moreover, SONA believes that 100% licensing will also affect composers and songwriters who choose not to be affiliated with ASCAP or BMI.

For example, the affiliates of SESAC and GMR, the two PROS not governed by consent decrees, could become subjects for ASCAP and BMI licensing depending on how song credits stack up. Additionally, under the 100% licensing model, a licensor could potentially bypass the co-owners and contact the administrator/hosting PRO to obtain a license for the entirety of a song without the consent of other co-writers. 

In addition, the 100% mandate may also discourage future songwriters from becoming members of ASCAP or BMI and migrate to SESAC and GMR, who are not bound by consent decrees and whose writers have more freedom, perhaps, to negotiate separately for themselves.

Finally, for SONA, full work licensing will not sit well with the practices of the reciprocal collection societies of ASCAP and BMI in Europe and elsewhere, where fractional licensing is the norm. If a considerable number of ASCAP and BMI repertoire would have to be excluded due to non-compliance with the existing standard, global collections for US songwriters abroad will suffer.

Moving forward

The DOJ has appealed SONA’s lawsuit, and it is likely that the music business will be paying attention to the state of this litigation, more than any action by ASCAP, BMI, or the Copyright Office. This is because both PROs are moving slowly in the courts, and the Copyright Office is, for the moment, standing on the wings.

The Copyright Office is on record for writing that 100% licensing is fraught with legal and logistical problems, not least those that could lead to the removal of a work from ASCAP and BMI and easily result in a dramatic decrease in repertoire available through these PROs’ blanket licenses. As for ASCAP and BMI, they are still contemplating their next move.

Upon hearing the DOJ decision on 100% licensing, ASCAP announced that they would pursue, in time, a “legislative solution to ensure the continued availability of fractional licensing as well as other remedies to the outdated consent decree regulations that disadvantage songwriters and composers in the digital age.” BMI has indicated it will engage the DOJ after complying with various legislative and judicial procedures it has in motion at rate court.

The vehicle that the DOJ has used to attempt to license music performance rights more conveniently and expeditiously is imperfect. However, the discussion over 100% licensing really has an air of inevitability about it, especially in an age where the transaction of a small value item of mass consumption like music is shackled by a culture of permissions that is preventing its unfettered trade. The DOJ has not shied away from its responsibility towards creating a more open market, so songwriters and their publishers are falling foul today of anti-trust legislation.

Still, one can excuse SONA for arguing that the songwriting business is now being regulated more than the pharmaceutical industry, as was argued in a Billboard op-ed by SONA’s founder Michelle Lewis. The difference between the two, of course, is that there are many more suppliers of product in the music business and that the public is not at risk from consuming music. Legislating on the minutiae of contracts and private arrangements that define creativity in music can be construed as undue government interference there. The State can certainly attempt to open up the market for buyers but it should not be able to force its creative class of sellers to operate by decree, especially when the public is not at risk.

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Kesha and Fleetwood Mac Among Featured Speakers for SXSW

Kesha and Mick Fleetwood of Fleetwood Mac fame are among the musicians on a varied list of featured speakers announced for this year’s South by Southwest Conference and Festival, which runs March 10-19.

Other just-added speakers include: Apollo 11 astronaut Buzz Aldrin, Senator Cory Booker, Veep actress Julia-Louis Dreyfus, GLAAD President Sarah Kate Ellis, actor Bob Odenkirk (Better Call Saul, Breaking Bad), Tinder founder and chairman Sean Rad, Planned Parenthood president Cecile Richards, actor and producer Seth Rogen (Preacher, Sausage Party) and Shark Tank‘s Chris Sacca.

Additionally, Jessica Shortall, the managing director of Texas Competes, a coalition of more than 1,200 Texas companies making the data-driven case for Texas to be welcoming to LGBTQ people, was named one of the this year’s SXSW keynote speakers.

“Jessica is a staunch advocate of equality, fairness and decency. Her relentless pursuit and approach of these values is both influential and inspirational,” said Hugh Forrest, SXSW’s chief programming officer, in a statement. “At a time when human rights are front and center in the U.S. we think this message of inclusion will resonate not just through her keynote but throughout much of our conference programming, where it has emerged as a major theme.”

Shortall joins previously-announced SXSW keynote speakers Lee Daniels, Jennifer Doudna, Gareth Edwards, Adam Grant, the creative director and lead DJ for Apple’s Beats 1 radio station Zane Lowe, Cory Richards, legendary record producer and Chic co-founder Nile Rodgers and Jill Soloway. 

Pussy Riot member Nadya Tolokonnikova is also among this year’s speakers.

This year’s SXSW Interactive, Film and Music badges will now include expanded access to more of the SXSW Conference & Festivals experience with secondary entry to most other SXSW events — which may help explain this year’s mixed speaker announcements.

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Bobbie Gale Joins Warner Bros Records as VP of Communications & Media

Bobbie Gale has joined Warner Bros. Records as vice president of communications and media. The announcement was made by Liz Morentin, who was named executive vice president of communications and media in December and to whom Gale will report to out the label’s Burbank, Calif. headquarters.

“Bobbie Gale brings a vast amount of media experience, strategy and creativity,” Morentin said in a statement, “which will serve her well as she joins us in the next chapter of Warner Bros. Records.”

For the more then two decades Gale has worked with a vast number of top artists. Previously Gale worked as an independent publicist at BB Gun Press for four years where she executed media strategies for a variety of music, film, and technology companies. Her clients included Albert Hammond Jr., Fitz & The Tantrums, Judith Hill, Neon Trees, Fetty Wap, OK Go, Glenn Campbell, Patti Smith and actress/musician Soko among others.

As senior national director publicity at Capitol Records from 2001 to 2008, Gale created national PR campaigns for artists that included Coldplay, Bryan Ferry, LCD Soundsystem, Liz Phair and Jane’s Addiction as well as Lollapalooza. Prior to that she worked at Atlantic Records as senior national director media relations in both LA and NY from 1992-2001 and worked with subsidiary labels Delicious Vinyl, Matador, Beggar’s Banquet, TAG, Big Beat and Mammoth Records as well as Atlantic artists that included Robert Plant & Jimmy Page and Stone Temple Pilots,

“I’m excited to be part of the great new team at Warner Bros. Records. I’ve known Liz for years, so it will be great fun to be able to work together,” said Gale.

WBR’s media department is clearly in something of an expansion mode as yesterday Morentin announced the promotion of Phylicia Fant to SVP in the same department.

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Zion.T’s Smooth ‘Your Song’ Livens Up Korean R&B

In 2015, Zion.T made his mark on the Korean R&B world with hit after hit. After moving companies last year, he returned on Tuesday (Jan. 31) with his OO EP, led by the single “Your Song.”

While maintaining his typical croons, Zion.T refreshed his sound on “Your Song” with the lively piano-based melody. The tune is jazzier than sentimental past hits like “No Make Up” and “Just,” but the singer’s latest is a refreshing, poppish update to his sonic style. With snapping, playful strings and a rock-tinged chorus, “Your Song” is a tightly produced track that complements Zion.T’s lush vocals.

The accompanying pastel-hued music video features the artist as a carefree romantic, dancing on rooftops in a Beetlejuice-like suit while trying to win over the object of his affection.

Although “Your Song” is a bit bouncier than his past singles, Zion.T returns to more languid pacing on other OO tracks, although the EP is dominated by an overall positive, upbeat sound; “Cinema” draws on boss nova music with its strings and percussion, while “Comedian” is standard Zion.T fare with its gentle rhythm and unhurried pace — but opens with sinister, Joker-esque laughter. And for anyone who really wants to relive Zion.T’s earlier hits, there’s “Complex.” The singer’s collaboration with BIGBANG’s G-Dragon blatantly references Zion.T’s past hits and samples music from his 2015 single “Yanghwa Bridge,” all while referencing the American magazine of the same name.

OO also features “Sorry,” a midtempo jam with rapper Beenzino, the groovy “Bad Guys” and indie-rock closer “Wind.” An instrumental version of “Cinema” completes the album at seven songs.

The new EP is produced by The Black Label, a subsidiary under YG Entertainment. Managed by producer Teddy Park, Zion.T is the only act currently signed to The Black Label.

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BMI Supports New Song Arts Academy 2017

BMI is proud to support its songwriter members at Song Arts Academy, a unique learning destination for songwriters taught by NYU and New School faculty member Billy Seidman. The advanced workshop starts Tuesday, February 28th and runs five consecutive Tuesday evenings: 02/28, 03/07, 14, 21, & 28, from 7PM – 9:30PM in Manhattan.

Past Song Arts Academy participants include artists signed to major record labels and The Voice and American Idol contestants, as well as hundreds of tri-state songwriters.

This is an advanced song crafting course. Come learn the techniques used by today’s top pop charting songwriters and producers.

This is an advanced song crafting course. Come learn the techniques used by today’s top pop charting songwriters and producers! See some of the strategies you’ll learn here.

The cost is $275 for the 5-week program. The workshop is limited to 15 and writers are encouraged to apply ASAP as the program fills up fast.

The Songwriter’s Workshop Intensive is based on the BMI Model. The class teaches those who want to write better songs a new vocabulary for how to listen to them. To achieve this, we use a unique critiquing system, giving writers definitive insight into what drives a song and what emotion is literally at its heart. By learning this critiquing system and the songcraft/decision-making process of the world’s greatest songwriters, workshop participants quickly see new directions in which to take their ideas and apply them to their own songs.

The Workshop Intensive offers a weekly writing assignment designed to “Grow your Ears” and sensitivity.  After 4-5 weeks, you’ll understand organically so much more about how the songs you love are constructed, and how to construct your own.

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Green Day Announce Summer Tour Dates

Green Day have announced the summer leg of their Revolution Radio tour, which will kick off on Aug. 1 in Auburn, Washington at the White River Amphitheatre, and hit amphitheaters, stadiums and arenas across North America through a Sept. 13 gig at Sleep Train Amphitheatre in Chula Vista, California. British rockers Catfish and the Bottlemen will open all the dates, which will include the veteran punk trio’s first-ever show at Chicago’s legendary Wrigley Field and the Rose Bowl in Pasadena, California.

Presale tickets for Idiot Nation members will go on sale on Tuesday (Jan. 10) at 10 a.m. here; general public tickets will go on sale on Friday, Jan. 13. Revolution Radio topped Billboard‘s Rock Airplay chart (dated Jan. 14) for a second time with the latest single from the album, “Still Breathing,” which rose 2-1.

Green Day’s summer tour dates:

8/1 — Auburn, WA @ White River Amphitheatre

8/2 — Portland, OR @ Moda Center

8/5 — Oakland, CA @ Oakland-Alameda County Coliseum

8/7 — Salt Lake City, UT @ USANA Amphitheatre

8/9 — Englewood, CO @ Fiddler’s Green Amphitheatre

8/11 — Kansas City, MO @ Sprint Center

8/12 — Omaha, NE @ CenturyLink Center

8/14 — Maryland Heights, MO @ Hollywood Casino Amphitheatre

8/16 — Noblesville, IN @ Klipsch Music Center

8/18 — Toronto, ON @ Budweiser Stage

8/20 — Cincinnati, OH @ Riverbend Music Center

8/21 — Cuyahoga Falls, OH @ Blossom Music Center

8/26 — Darien Center, NY @ Darien Lake Performing Arts Center

8/28 — Mansfield, MA @ Xfinity Center

8/29 — Hartford, CT @ The XFINITY Theatre

8/31 — Camden, NJ @ BB&T Pavilion

9/1 — Raleigh, NC @ Coastal Credit Union Music Park at Walnut Creek

9/3 — West Palm Beach, FL @ Perfect Vodka Amphitheatre

9/5 — Tampa, FL @ MidFlorida Credit Union Amphitheatre

9/6 — Orange Beach, AL @ The Wharf Amphitheater

9/8 — San Antonio, TX @ AT&T Center

9/9 — Austin, TX @ Austin360 Amphitheater

9/11 — Albuquerque, NM @ Isleta Amphitheater

9/13 — Chula Vista, CA @ Sleep Train Amphitheatre
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The Value of YouTube

In the beginning of the XXth Century music consumption did not compare with today. Music publishers, for instance, were used to generate revenue mostly through the commercialization of printed sheet music. But much like the current moment, innovators were disrupting the music scene, bringing to market new inventions like the record player and piano rolls. These inventions transformed the way music was brought to people’s ears. And composers and publishers were not being fully compensated for the use of songs because the legal system at the time was not structured to compensate them for these new technologies. In 1908, the Supreme Court even ruled that manufacturers of music rolls for player pianos did not have to pay royalties to composers (White-Smith Music Publishing Company v. Apollo Company).

Congress eventually adapted to the marketplace and enacted the Copyright Act of 1909, implementing a Compulsory Mechanical License allowing anyone to make a mechanical reproduction of a musical composition without the direct consent of the copyright owner, provided that the person adhered to the provisions of the license which included a royalty payment at a rate set by the Copyright Royalty Board. Congress intended it to primarily govern piano rolls, but in fact this compulsory license made it possible to develop later a market for phonorecords, in which music publishers and composers were compensated in tandem with the commercialization of the recorded music product by the record labels and their artists.

By the end of that century, a new wave of innovation occurred with the advent of the Internet. Anticipating the potential issues arising therein, in 1998 Congress enacted the Digital Millennium Copyright Act (DMCA). Amongst other provisions, the DMCA created certain exemptions from liability for copyright infringement by Internet Service Providers (ISPs) and other intermediaries. These so-called Safe-Harbor provisions allowed the emergence of new forms of media distribution and put a system in place which allowed content to be removed from a website at the request of the copyright owner. Similar provisions were concomitantly passed in Europe.

YouTube could only operate legally due to these safe harbor provisions. The global video-sharing website founded in 2005 and acquired by Google in 2006, quickly became one of the most popular websites in the world, and currently accounts for 40% of all music listening. More people currently listen to music on YouTube than all other on-demand streaming services combined.1

Despite its popularity among music fans, recently, YouTube has been the target of a strong backlash from music industry executives and artists, as part of a public relations effort to influence negotiations between the major record labels and YouTube. The current licensing deals are about to expire later this year.

The central argument of the record labels is that there is a “value gap” between what YouTube is willing to pay for music licenses and their real market value. YouTube can strong-arm the music industry by offering an artificial low price for licenses, compared to similar licenses negotiated freely in the market, because YouTube could instead of paying the license continue using the music content and only take it down after receiving notices from the copyright owners, which has to be done on a case by case basis.

The IFPI, in its Global Music Report of 2016 claims safe harbor rules are being misapplied, because they were originally “intended to protect truly passive online intermediaries from copyright liability, and not designed to exempt companies that actively engage in the distribution of music online from playing by the same rules as other online music services.2

YouTube’s Head of International Music Partnerships, Christophe Muller, in a response to the music industry claims, affirmed that the video platform has licensing deals in place through which they’ve already paid out $3 billion to the music industry, and that 50% of it comes from user-generated content, identified and claimed by the rights’ holders through their automated rights management tool, ContentID, which handles 99.5% of the infringement claims on their platform.3

Heating up the war between content and technology, is Irvin Azoff, one of the most powerful players in the music industry and the head of Global Music Rights, a new company that collects on public performance royalties. In an open letter published widely, Azoff writes that YouTube should grant more control to rights holders on how their material could be used within the platform. Content owners should decide if their product is to be available for free, or only behind a pay-wall — namely, the paid subscription service YouTube Red, where YouTube’s original video content is made available exclusively. Azoff continues pressuring YouTube to let rights’ holders decide whether or not they want to have their content available in the platform at all. He suggests replacing the take down of unauthorized uses on a case by case basis with a “stay down” system, in which content owners would be able to opt-out of the website and not have their music available within the website.4

Congress, through the Copyright Office, is currently performing a study to possibly review Section 512 of the DMCA.5 The issue of remuneration on YouTube is one of the few in which the labels, publishers, and artists concur. Many of them filed a petition to the Copyright Office pledging reform, and more recently 180 artists, including Taylor Swift, Paul McCartney, and Kings of Leon, ran an ad campaign in political magazines in Washington, DC calling for changes to the Digital Millennium Copyright Act. A similar letter was signed by more than 1,000 acts addressed to the president of the European Commission, pledging reform of similar provisions in European law.

In the meantime, artists are finding some of their own ad hoc solutions.   As long as they can put out content periodically, they can collect through unconventional means. The band Walk Off The Earth made $10,325 for every video they released on YouTube by using Patreon. This is a crowdfunding platform created by Jack Conte, half of the duo Pomplamoose and a prolific YouTuber. Patreon depends on steady fan funding, and Walk Off The Earth reached out to its fan base, 1,400 of which contributed. New possibilities for music financing are also driving the market, and offering alternatives when the wheels of legislative change turn slowly.

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BMI Mourns Loss of Country Singer Andrew Dorff

BMI is saddened by the news that award-winning songwriter Andrew Dorff passed away unexpectedly this week. During his short career, Dorff penned several hits including Kenny Chesney’s “Save It For A Rainy Day,” Hunter Hayes’ “Somebody’s Heartbreak,” as well as Blake Shelton’s “Neon Light” and “My Eyes.” All four songs garnered BMI Million-Air Awards, honoring one million radio spins. Dorff also had cuts with Old Dominion and Martina McBride, among others.

Jody Williams BMI Vice President of Writer/Publisher Relations, Nashville, remarked, “The BMI family is incredibly shocked and saddened to learn of the passing of songwriter Andrew Dorff. The Nashville music business community will miss his kind and generous spirit, his unparalleled talent, and his gift of friendship. BMI was so fortunate to be a part of his career from the very beginning. Whether swinging by our office for a quick meeting or receiving an award at our annual dinner, Andrew’s presence was always a welcome one in the room. He will be sorely missed by our entire staff.”

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