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I Was Interviewed By The Congressional Budget Office Regarding The Music Modernization Act, And Now I’m Even More Concerned For DIY Musicians

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I just spent the last hour giving a copyright law and music publishing crash course to a Principal Analyst at the Congressional Budget Office who’s tasked with determining the economic impact of the revised Music Modernization Act (which, by the way, now includes the Musical Works Modernization Act (which is an update to the originally proposed MMA, affecting songwriters and publishers), AMP Act (affecting producers and engineers) and CLASSICS Act (affecting recording artists of Pre-1972 records)) on states, DSPs and music creators.

He emailed me yesterday and asked to speak with me about the magnitude of the unclaimed royalties market, although we ended up discussing much more than that. Apparently he had discovered a presentation that I gave at the Music Industry Research Association’s MIRA Conference last year titled “The State of Unclaimed Royalties and Music Licenses in the United States.”

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Email from a Principal Analyst at the Congressional Budget Office

At the top of the one hour call he began by stating that he’s had to learn copyright and music publishing in 2 days (2 days!!!). The guy who’s going to contribute to a recommendation to Congress that will impact whether or not 3 different bills will be enacted and change our copyright law has spent only 2 days learning about the complex web of regulations and customs that govern an entire industry and its millions of constituents. I guess this is how legislation is vetted; economically.

The good news is he had a lot of great questions and had did a significant amount of research prior to our call. To be fair, I meet plenty of music industry professionals who have (or at least demonstrate) less knowledge of what’s going on in the world of music rights administration and music publishing than this gentleman; and they’ve spent years in the industry! It is refreshing to know that the government does inquiry with non-lobbyist from time to time when considering the impact of proposed legislation.

At any rate, he was open to hearing my advocacy on behalf of music creators (specifically songwriters, music producers, and recording artists of Pre-1972 records) as well as my substantiated opposition to some features of the revised MMA (generally those features that would disproportionately benefit music licensees (primarily, DSPs) and major publishers while leaving DIY music creators to fend for themselves).

[This paragraph was omitted on 4/20/2018 as a result of a clarification that I received for Title 3 of the MMA]

Another issue I have is with the ownership of the unclaimed mechanical royalties fund(s). The Musical Works Modernization Act (Title 1 of the MMA) would, for the first time, codify the existence of a mechanical royalties black box in the United States. The current US Copyright Act does not give copyright owners a right to earn or collect mechanical royalties if their musical works are not registered with the US Copyright Office.

Here’s an excerpt from one of my articles on the matter:
After the NOI has been filed, it is then the copyright owner’s responsibility to become aware of and locate the NOI, and then take action in order to receive mechanical royalties. The law states, “To be entitled to receive royalties under a compulsory license, the copyright owner must be identified in the registration or other public records of the Copyright Office.” (17 USC 115(c)(1))
The law also makes it clear that the licensee is not required to pay mechanical royalties until after the copyright owner has been identified. “The owner is entitled to royalties for phonorecords made and distributed after being so identified…” (17 USC 115(c)(1)) What’s worse, the law does not require the licensee to pay retroactively for mechanical royalties earned before the copyright owner is identified. “…but is not entitled to recover for any phonorecords previously made and distributed.” (17 USC 115(c)(1))

However, intermediaries (e.g. Harry Fox Agency, Music Reports, Loudr) that process NOIs (Notice of Intent to Obtain a Compulsory Mechanical License) on behalf of their DSP clients do encourage their clients to set aside unattributed mechanical royalties into an escrow account (the so-called “black box”). The royalties sit there until the copyright owner raises his/her/their hand to collect the earnings or until the entity decides to disburse or absorb the uncollected funds.

Generally, this is a “good faith” policy.

Now, since the MMA will codify the black box as a matter of law, this private sector matter will become a government matter. The question, then, is will federal government or state governments have the right to maintain the unclaimed royalties black box?

Currently, unclaimed property laws enable states to receive and hold unclaimed property (such as money) when the property owner can not be reached. For example, California’s Unclaimed Property Law requires corporations, businesses, associations, financial institutions, and insurance companies (referred to as “Holders”) to annually report and deliver property to the California State Controller’s Office after there has been no activity on the account or contact with the owner for a period of time specified in the law – generally (3) three years or more. I’ve had a few refunds from services that I used and cancelled when I moved from one place to another. I did not provide the service with a forwarding address, so my refund became unclaimed property and ended up with the California State Controller. By searching the CSC’s database, I was able to find and then claim the property (pictured below).

If your property goes unclaimed too long (each state has their own statute of limitations), the state has the right to liquidate the property (e.g. sale an unclaimed vehicle) and absorb proceeds as miscellaneous revenue to the state’s budget [lawyers, correct me in the comments if I’m wrong].

Because states unintentionally (benefit of the doubt) benefits from unclaimed property, I could see states with significant music industries (e.g. California (Los Angeles), New York (Greater New York City), Tennessee (Nashville), Georgia (Atlanta)) suing the federal government or the Mechanical Licensing Collective (the entity that would be granted under the MMA to administer a new blanket licensing system along with a centralized database of musical and sound recording copyrights to match works with usage reports submitted by digital services) over the right to collect unclaimed royalties, especially if the black box is hundreds of millions of dollars (which I believe it is).

There are many other issues that I have with the MMA such as the proposed formation, structure (especially the imbalance of representation on its board where there would be 10 publishers and only 4 songwriters (why not 7/7?)), and governance of the MLC and similar unclaimed royalties issues related to the CLASSICS Act; among other issues. I’d be happy to discuss, but this post is already yuge!

In a word, I am all here for improving royalty rates, ensuring the fair treatment of music copyrights and moving towards a more equitable representation of music creators. However, the MMA is not quite there yet and passing it as-is, with all of its ambiguity, would be a shame. I don’t know if the music industry will have another shot to make this kind of update to the Copyright Act in the next 20 plus years (the Digital Millennium Copyright Act of 1998 was the last significant update).

We should probably get it right — now.

[Podcast] “How Tech Can Save The Music Industry” Panel Recording From SXSW 2018

SXSW 2018

I had the pleasure of participating on the panel “How Tech Can Save The Music Industry” at SXSW 2018 with Benji Rogers (Pledge Music & dotBlockchain), Jason Robert (HelloSugoi), and moderated by Eron Bucciarelli (Soundstr).

The music industry is in dire need of change not only to thrive, but survive. Streaming, pirating and the secondary ticket market have dealt serious blows to our industry’s major revenue streams, but technology can be our savior. Join experts from the royalty, rights, ticketing and metadata blockchain sectors to learn not only how tech can provide short-term solutions, but also build a more sustainable industry. Join us to learn how tech can save the music industry.

Ask Me Anything About The Music Business, With Dae Bogan

Ask Me Anything

Ask me your music business question and I’ll attempt to provide you with an answer or direct you to a resource with a better answer or guidance. I cannot provide specific legal advice, but I can discuss general music business practices. Join the conversation on Facebook, Twitter, Linkedin, or DaeBoganMusic.com. Simply drop your question in the comments section wherever you see the above image.

500 Spotify Playlists That You Can Pitch To Right Now

Several members of the Artist Managers Connect Facebook group (a global networking group of artist managers and other music industry professionals such as service providers, music tech founders, and label/publishing reps) curated a list of third-party Spotify playlists.

This amazing resource is a Google Sheet posted by AMC member Jorge Mejias with a caption:

Since I truly hate the fact that there are “PR” companies offering “Spotify Playlist Pitching” for upwards of $1K+ making false promises they know and then saying something around the lines of “it’s just how the industry is” or “Spotify playlisting is tough” or whatever-

Here is a google sheet w/ info on some of the most popular third party Spotify playlists that most of these companies are pitching to because-

1) this information is all public so I don’t feel bad giving it out & saving people some research

2) what you get out of it = how much time you dedicate to it

3) getting scammed in 2017 / not helping prevent it when you can is silly

Contact info is all out there so stop making excuses. Also the follower count on these are outdated.

*Edit* – also this is a thank you to everyone from AMC who has helped me out thus far. you rock~

*Edit2* – also please refrain from publicly posting any contact info- thank youuu!

*Edit3* – this post by no means aims to discredit companies who do properly provide pitching services. Dan put it best by saying “Would like to caveat that some of us work records at Spotify and Apple Music very transparently and based on years of repertoire and success for our artists within the platform’s respective ecosystems. ”

*Edit4* – thank you Dustin for contributing his spreadsheet

The list requires you to do a little bit of work to reach out to the curator, but the awesome thing about the list is that they’ve already done the work to identify the curator’s Spotify username and have tracked followers and genre to help you sort and prioritize.

List: https://docs.google.com/spreadsheets/d/1-jf6HkRHay43pv8f6X_VneDPuEY405YV3Ool8GVdZjs/htmlview

Go forth and pitch your music!

Let me know if you land a placement.

 

 

Ask Me Anything About The Music Business, With Dae Bogan

Ask Me Anything

Ask me your music business question and I’ll attempt to provide you with an answer or direct you to a resource with a better answer or guidance. I cannot provide specific legal advice, but I can discuss general music business practices. Join the conversation on Facebook, Twitter, Linkedin, or DaeBoganMusic.com. Simply drop your question in the comments section wherever you see the above image.

Music Business Association To Host Webinar On Black Box Royalties Presented By Dae Bogan

music business association

Music Business Association will host Dae Bogan’s webinar on black box royalties on Thursday, October 26th at 11am PDT / 2pm EST. Open to all.

Description: The global music licensing ecosystem is ripe with inefficiencies, complexities and legal mumbo-jumbo that affects the livelihood of music creators and copyright owners when royalties become trapped. The idea of not being paid when your music earns royalties is frustrating. Some would even call it highway robbery! But there are some practical solutions that every interested party in music royalties can put to use immediately to ensure that your music industry administration operations get you paid. This webinar will demystify so-called “Black Box” royalties and demonstrate how rights-holders can leverage technology to combat this global issue.

Register at https://register.gotowebinar.com/register/5742451649783265539

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