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A Curated List Of My Thoughts On The Music Modernization Act (And Related Topics)

music-modernization-act

I am a very vocal music creators’ rights advocate and copyright purist. Often, I have the opportunity to share my *opinions* on topics within and circling the music industry that impact the ways in which music creators — especially DIY musicians — navigate and thrive in the United States.

Over the last ten months I have been especially vocal about the Music Modernization Act. I’ve been quoted in Billboard, Rolling Stone, Pitchfork and Digital Media News. I’ve been invited to panel discussions at music industry conferences and keynotes at universities. And I have written several think pieces (and rants) on the bill, which is now law, and related issues.

Still, I am asked what my thoughts are on the MMA.

I’ll summarize my thoughts by saying that I believe the intent of the MMA is good and admirable on its surface — that is, to improve the way rightsholders are accounted to and paid for the use of their music. I believe there is some good stuff in the MMA; particularly, the entirety of Title 2 (The CLASSICS Act) and Title 3 (The AMP Act). However, I feel that there is still work to be done. I also feel that some compromises, at the expense of DIY music creators, were made too easily (this is partially based on private discussions that I’ve had with individuals with privileged knowledge of the negotiations and dealings that took place during the drafting and subsequent amending of the MMA). That being said, I also believe that the soon to be formed Mechanical Licensing Collective has the opportunity to prove to songwriters that this law was truly about them.

Only time will tell.

Here’s a 2018 curated list of my “thoughts” on the Music Modernization Act (and related topics):

  • (Oct 16, 2018) Here Are 10 Ways That The Music Licensing Collective (MLC) Can Set The Bar As A Collective Licensing Organization In The 21st Century – https://bit.ly/2RW9kW2
  • (Sep 14th, 2018 in Pitchfork) Why So Many Hip-Hop Producers Are Putting Business Before Beats – https://bit.ly/2PEsi1x
  • (Aug 19th, 2018) Another Music Modernization Act Opinion Piece – https://bit.ly/2NLp9LC
  • (Aug 15th, 2018 in Rolling Stone) Why More Pop Songwriters Are Stepping Into the Spotlight – https://bit.ly/2ClAuAc
  • (Jul 24th, 2018) Songwriters Are Owed Nearly $2B In Unclaimed Royalties!!! — Maybe More — I’ve Been Saying This For Some Time Now (Against Pushback), But Finally The Press Has Confirmed It – https://bit.ly/2CMR6Sp
  • (May 15th, 2018 in Billboard) Black Box Royalties Myths, Common Misconceptions Debunked at Music Biz 2018 – https://bit.ly/2q4dhLD
  • (May 7th, 2018 in Digital Music News) Is the Music Modernization Act Enabling ‘Legal Theft’ Against Smaller Artists? – https://bit.ly/2IugrCS
  • (Apr 25th, 2018) 5 Ways The Music Modernization Act Could Be Fairer To ALL Music Creators – https://bit.ly/2Jzn1tb
  • (Apr 20th, 2018) I Was Interviewed By The Congressional Budget Office Regarding The Music Modernization Act, And Now I’m Even More Concerned For DIY Musicians – https://bit.ly/2AdwpN0
  • (Jan 17th, 2018) – My Thoughts On The MMA In Light Of The CRB Mechanical License Rate Decision – https://bit.ly/2P6bT98

Where do you stand on the MMA?

Here Are 10 Ways That The Music Licensing Collective (MLC) Can Set The Bar As A Collective Licensing Organization In The 21st Century

music licensing collective dae bogan

If you work in the music industry and own a radio, TV, smartphone, or computer then you’ve probably already heard that the The Orrin G. Hatch–Bob Goodlatte Music Modernization Act (MMA) has been signed into law. At this point, every major music rights organization has published their praise of the legislation, which will create a blanket streaming mechanical license for Spotify, Apple, Amazon, Google, Tidal, and other on-demand music streaming companies; bring pre-1972 sound recordings under federal copyright protection and open up a flow of royalties from digital services to the artists (or their estates) and copyright owners of those recordings; and codify an allocation of digital radio royalties to music producers.

Title 1 of the MMA, also called Music Modernization Act, sets out  provisions and guidance for the formation of a collective mechanical licensing body to be called the Mechanical Licensing Collective (MLC). The MLC will administer a safe harbor blanket license for the streaming of musical works, collect licensee fees from licensees, prepare and remit statements of earnings to songwriters and music publishers, and make royalty payments to the same.

The MLC will join the ranks of SoundExchange, ASCAP, BMI, and SESAC in the sense that it will become a powerful representative of the collective rights of thousands of music creators and rights-holders in the United States. However, unlike its counterparts, the MLC will be born in the 21st century. And as a 21st century collective licensing organization, the MLC has the unique opportunity to implement, at inception, 21st century business practices utilizing 21st century best practices and technologies.

Here are 10 ways that the Mechanical Licensing Collective can set the bar as a 21st century collective licensing organization:
 
1.) Provide its members with a data BI (business intelligence) dashboard to better visualize their mechanical royalties data and dive deeper into their statements. The dashboard could enable forecasting based on projected streaming activity (maybe offer scenario planning, which makes it possible to attract loans against future royalties). They could ingest data from a service like BuzzAngle to offer estimated royalty accrual in real-time so that members who are artists can see the net effect of playlist streaming campaigns on their bottom line and choose to invest more into campaigns in virtual real-time.
 
2.) Maintain a public and accessible unclaimed royalties database. Deploy artificial intelligence to evaluate unmatched usage reports as opposed to relying solely on exact name and ISWC matches. And expand the statute of limitations on unclaimed royalties to 10 years
 
3.) Require DSPs who take advantage of the safe harbor streaming mechanical license to recommend (and provide guidance) to aggregators and labels to provide composition ownership information in their metadata when uploading releases to the DSP. This can be done with custom parameters in DDEX ERN or via the new DDEX MWN (Musical Works Ownership) message schema.
 
4.) Work with the U.S. Copyright Office to create an integrated musical works registrations process so that works are simultaneously registered with the MLC and LOC.
 
5.) Expand the statute of limitation period on unclaimed royalties to 10 years and hold funds in an interest-bearing escrow account from which 25% of the interest flows to the general fund of the MLC and 75% of the interest is paid to the payee, along with the balance of unpaid royalties, once the payee has come forward or have been found.
 
6.) Commission an annual audit and publish the findings to members.
 
7.) Use blockchain, where applicable.
 
8.) Remit statements and payments monthly when a member opts to receive direct deposits and electronic statements.
 
9.) Display assessed administration fees on royalty statements.
 
10.) Do not implement high usage weights or bonuses.

Another Music Modernization Act Opinion Piece

Some music industry executives believe that my position on many issues affecting music creators is too bullish. They dismiss my analyses as sensationalism. They believe, or are at least silent on the notion, that demanding the fair and equitable treatment of middle-class songwriters and recording artists should come with exceptions that disproportionately benefit corporations: major publishers and digital service providers.

But I am a copyright purist.

I believe that the authors of copyrighted musical works — songwriters — should have more say in the way in which their creations are valued and monetized in the marketplace. I do not believe in trickle-down economics or its promise that what’s best for the few at the top will benefit the majority at the bottom.

Greed disproves this all of the time.

Greed is asking songwriters to forgo the potential financial upside of bringing forward legitimate claims of past copyright infringement while simultaneously telling the songwriter community that monies that may become due to them could be redirected, by market share, to the few at the top who negotiated the preemptive dismissal of claims in the first place. Greed is telling artists to campaign for a piece of legislation that will reduce the number of entrants into the on-demand streaming market while simultaneously controlling/dominating the editorial opportunities of the DSP incumbents, greatly reducing opportunities that would otherwise be made available to emerging artists by startups that wish to partner with and elevate emerging artists.

I do believe that the Music Modernization Act will pass. I just hope that the decision-makers give some real thought to the millions of up-and-coming music creators who are not represented by the individuals who wrote the legislation that’ll change the way their copyrights will be exploited in the U.S.

Congress Is Giving Musicians First Chance of Fair Pay in Decades


“‘The MMA gives a digital service like Spotify or Amazon a more convenient way of licensing songs,’ Dae Bogan, founder of music management platform TuneRegistry and a longtime music rights advocate and executive, explains. ‘And it opens a potential windfall of income to legacy artists who were left out of the digital boom.’ But Bogan adds that the legislation doesn’t come close to fixing all, or even most, of the problems in music royalties for labels, publishers and musicians; the simplified processes just make it more likely they’ll get the money they’re due.” via RollingStone

Read the full piece here: https://www.rollingstone.com/music/news/congress-is-giving-musicians-first-chance-of-fair-pay-in-decades-w520301

5 Ways The Music Modernization Act Could Be Fairer To ALL Music Creators

music modernization act

 

Today, the Music Modernization Act has passed the U.S. House of Representatives with a unanimous 415 – 0 vote (16 reps abstained from voting at all).

The mega bill — which consists of a bundle of Titles that were previously independently proposed bills — will change the way in which musical works are licensed by digital service providers and provide a safe harbor for infringement under a blanket licensing mechanism (Title One – Musical Works Modernization Act); it will bring recordings made before 1972 under federal copyright protection (Title Two – Compensating Legacy Artists for their Songs, Service, and Important Contributions to Society Act or CLASSICS Act); and it will codify an allocation of digital radio royalties to music producers and sound engineers (Title Three – Allocation for Music Producers Act or AMP Act).

On its surface the MMA sounds amazing, when summarized this way.

Accordingly, the passing of the MMA in the House was widely praised by executives from the most recognizable U.S. music rights organizations and trade associations (e.g. NMPA, RIAA, DiMA).

However, there remains many uncertainties in the language of the bill presenting an opportunity for the Senate to course correct before the bill becomes a law that would take over 20 years to improve, again (the Digital Millennium Copyright Act was the last piece of legislation impacting the music business — it was enacted in 1998).

 

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

 

So, what could the Senate do to make the bill more fair to the tens of thousands of music creators who are not represented (or underrepresented) by the industry sponsors of this bill? Well, there’s at least five issues that can be addressed immediately:

  1. Ban the practice of distributing by market share unclaimed royalties that rightfully belong to DIY musicians and songwriters.
  2. Mandate that record companies provide complete and accurate (at the time of release) publishing information for each track within the metadata delivered to distributors/aggregators, and that the latter provides that information to DSPs.
  3. Do not expunge all past copyright infringement claims, only future claims upon the date of the enactment of the law.
  4. Maintain a representative MLC board of 50% publishers and 50% songwriters (with at least 1 unsigned songwriter on the board (e.g. Chance the Rapper)) as opposed to the BS 10 publishers, 4 songwriters (who’ll likely come from the major publishers anyway) that has been written in the bill.
  5. Respect the Berne Convention by not disregarding the musical works of non-US songwriters who have not (and will not) register each of their songs with the USCO or MLC.

How else could the MMA be improved? Or do you feel that it is fair enough? Let’s discuss in the comments.

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

cbo1

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.”

Screenshot (533)

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.

My Thoughts On The MMA In Light Of The CRB Mechanical License Rate Decision

In light of the CRB’s ruling today to increase mechancial royalty rates for on-demand DSPs, I would caution against passing the Music Modernization Act without first amending it to include some very necessary guarantees for DIY musicians.

Given the recent ruling to increase mechanical rates, penalize DSPs for late payments, and remove the TCC cap DSPs will be more incentivized to cling to the safe harbor components of the MMA to limit their financial responsibility to songwriters.

I also fear that the blanket license (combined with the elimination of the statutory damages provision against infringement) would hurt more DIY musicians than protect compared to the existing compulsory licensing schema where today an independent can fully self-administer his/her mechancial rights via a service like TuneRegistry or with a third-party administrator like Songtrust. Why? Because the unclaimed/unpaid (aka “black box”) royalty fund will also increase by 44%, giving major publishers a bigger windfall of market share distributed gains from a royalty pool that generally belongs to unidentified independent songwriters.

What incentive does DSPs, who must pay the rates anyway, and major publishers, who will undoubtedly control the mechanical licensing collective body, have to ensure the works of DIY musicians are properly represented and accounted to and what power do DIY musicians have to assert their limited rights?

I could be completely and utterly wrong.

However, the devil is in the details and the MMA, while it does streamline the process of mechancial licensing in the United States for DSPs it also effectively limits the warranties and representations of DIY musicians.

Every article written about MMA is generally written from the perspective of publishers and NMPA members. As an advocate for and service provider to DIY musicians, my perspective is a bit different and more nuanced.

The decision today by the CRB was a win for all songwriters. The MMA is a win for major publishers. It must be amended.

I’m Working On A Side Project Addressing ‘Black Box’ Royalties

music_and_money_by_bobvogler

As of this writing, there are currently 116,133 verifiable* payments owed to music creators and rights-holders that are sitting in unclaimed/undistributed royalties escrow accounts (referred to as “Black Box” funds**) in the United States.

The actual number of individual payments owed is likely closer to or exceeds 1 Million, however the actual number is unknown because the administrator(s) of some of the biggest Black Box funds have not made public their list of payees to whom they owe royalties.

Unfortunately, due to the statute of limitations on these funds many of these payments expire. Every month payees unknowingly forfeit their rights to these payments and the interest in the royalties revert back to the administrator. This happens because the payee does not contact the administrator of the fund to claim their royalties. Granted, most payees are unaware that these payments are waiting for them because the administrator is unable to reach the payee for various reasons.

It has been estimated that the global “Black Box” royalties could be in the billions of dollars owed to music creators and rights-holders.

Imagine working somewhere and then you do not receive a paycheck because the HR department does not have your new address. Not a perfect analogy, but not receiving monies that you’ve earned as a result of your hard work seems unfair.

THIS IS A HUGE PROBLEM

So, I am happy to announce that I am working on a side project called Royalty Claim. Royalty Claim will attempt to work with as many of these administrators to aggregate their databases of millions of records of unclaimed/undistributed royalties and make that information available to the public. There are other services and insight that we will offer through Royalty Claim to help educate music creators and rights-holders on Black Box funds and how to limit/prevent their earnings from falling victim to the broken global music licensing ecosystem (such as taking control of your music catalog with TuneRegistry).

Want to get updates on the Royalty Claim project and be the first to know when we have something to reveal? Sign-up for our email list at www.RoyaltyClaim.com.

Also, follow @RoyaltyClaim on Twitter.

* These 116,133 payments are specifically verifiable because the list of payee names can be gathered from several databases.
** I am currently aware of over 30 funds and sub funds being managed in the United States. However, there are definitely many more that are “private”.

I’m Meeting With Congressman Adam Schiff To Discuss The Rights of Music Creators #GIMD

Congressman Adam Schiff

Congressman Adam Schiff represents California’s 28th District

On Wednesday, as part of the “GRAMMYs in My District” initiative, I will join a select group of fellow The Recording Academy / The GRAMMYs members to meet with Congressman Adam Schiff to discuss the rights of music creators. And across the United States, other members will be meeting with their district’s Congress persons as well.

I hope to be able to address the issues that I care about, which affects music creators across the US. I want to urge my Congressman Schiff to support the Fair Play Fair Pay Act, which would create an income stream for artists when their music is played on AM/FM radio (much like the rest of the world) and support the AMP Act, which would allocate royalties to music producers and engineers when the music they’ve worked on is performed on SiriusXM, Music Choice, Pandora, and over 2,500 webcasters and digital music services.

In light of the recent firing of the Register of Copyrights, Maria Pallante, which happened oddly at a time when Google and Amazon is using the loopholes of the U.S. Copyright Act to avoid paying thousands of songwriters for the use of millions of songs across their music properties, I want to address if and how Congress plans to close these loopholes that enable wealthy multinational corporations to stiff the little guys. And I would like Congress to help us move towards a system of equitable representation of songwriters and fair market royalty rates for compulsory licenses.

We will be posting updates during and after these meetings across social media. Follow the hashtag #GIMD for posts. Learn more about The Recording Academy’s Advocacy & Public Policy at www.grammy.org/recording-academy/advocacy.

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