Friday, February 24, 2017

Music Coalition to Congress: Fix DMCA's Safe Harbor!

Written by Emmanuel Legrand — A large coalition of organizations covering all sectors of the US music community has asked Congress to act to fix the safe harbor provisions in US copyright law if tech companies did not voluntarily agree to adopt measures to help address the "failings" of safe harbors.

The call came through a filing, submitted by Kenneth Doroshow and Scott Wilkens from New York law firm Jenner & Block, on behalf of 15 organizations. The filing is part of the call for comments initiated by the US Copyright Office in its review process of Section 512 of the Digital Millennium Copyright Act (DMCA), which introduced in 1998 safe harbor provisions. These provisions have allowed internet services to avoid liability for content posted on their platforms in exchange for complying with take down notifications from rights holders. The filing also comes at a time when the chairman of the House Judiciary Committee, Bob Goodlatte, plans to overhaul parts of US copyright law.

For the music community, the DMCA's safe harbor provisions are one-sided instead of being balanced, and have led to a slow erosion of the value of music, exemplified by the small amount of royalties paid by video streaming platform YouTube to rights holders, or by the absence of licensing deals in place with FaceBook.

In the filing, the signatories claim that the DMCA safe harbor "suffer from numerous key failings that have resulted in a heavily skewed playing field where service providers can either comply with their minimal safe harbor obligations—and thereby obtain immunity from damages liability and avoid obtaining licenses from copyright owners—or use the safe harbor strategically in licensing negotiations with copyright owners to extract rates far below fair market value."

The remedy, according to the filing, is in the hands of service providers, who could "help to restore much of the balance Congress intended to strike by agreeing to adopt standard technical measures and/or voluntary measures to address the DMCA safe harbor's key failings."

However, if said technology companies were not actively seeking such balance, action from Congress would be needed. The filing concludes: "The Music Community stands ready to work with service providers and other copyright owners on the development and implementation of standard technical measures and voluntary measures. However, to the extent such measures are not forthcoming, legislative solutions will be necessary to restore the balance Congress intended."

The submitting organizations include: American Federation of Musicians; American Society of Composers, Authors and Publishers; Broadcast Music, Inc.; Content Creators Coalition; Global Music Rights; Living Legends Foundation; Music Managers Forum – United States; Nashville Songwriters Association International; National Academy of Recording Arts and Sciences; National Music Publishers’ Association; Recording Industry Association of America; Rhythm and Blues Foundation; Screen Actors Guild – American Federation of Television and Radio Artists; SESAC Holdings, Inc.; and SoundExchange.

At the same time, singer, songwriter and producer T Bone Burnett has submitted a video calling for reforms to the DMCA's notice-and-takedown process as part of the US Copyright Office’s review of Section 512. Burnett is also Advisory Board Member of the Content Creators Coalition, or c3, an artist-run non-profit advocacy group representing creators in the digital landscape.

In the video, Burnett, claimed that, for artists and creators, "instead of amplifying our voices to lead the fight for change, it [the Internet] undermines and silences us." The problem, according to Burnett comes from the DMCA provisions on safe harbors that were "supposed to balance the Internet’s openness with creators’ ability to earn a living wage from their work." But his verdict is blunt: "Those safe harbors have failed."

He subsequently urged policy-makers to fix the DMCA's safe harbor provisions and offered a way forward: "The safe harbors must be restored – so only responsible actors earn their protection, not those who actively profit from the abuse and exploitation of creators’ work. Technology must be enlisted to make the system work better, not to roadblock progress in a pointless arms race of whack a mole and digital deception. Creators must be given meaningful tools to earn a living from their art."

He concluded: “Everyone with a stake in the Internet’s success and the health of our creative democracy must work together to make this right. It’s time for Congress to close the loopholes in section 512 of the DMCA. Our culture is at stake.”

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Thursday, February 23, 2017

Apple Music. Facebook and Comcast make mobile video moves

Written by Jonathan Takiff — With Xfinity Stream, Comcast has some new ammunition in the ever-escalating war for mobile viewers' eyeballs. A recent announcement of this improved mobile-video app for subscribers comes during the same week that major mobile-phone providers have proffered new or improved subscription offerings with an all-you-can-stream option, appealing to those on-the-go viewers.

Also, two high-profile online services not normally associated with video - Apple Music and Facebook - have just shared plans to make and push original video content to their user base.

Launching Feb. 28 as the successor to the current Xfinity TV App, the Stream upgrade will fine-tune and enhance the added availability of subscribers' channel lineups on their phones, tablets, and laptops. New to the mobile app is "X1-like" functionality, including the ability to navigate the app in Spanish as well as English, to search content by categories, access content ratings and reviews (from Common Sense Media), and customize parental controls.

When viewing out of the house, subscribers will now have access to more than 200 live channels, including 95 that were not on the streaming service just a year ago. Network TV channel content remains rare at present for "away" viewing but is accessible when the Xfinity Stream app is running on a non-TV device inside the subscriber's residence.

Xfinity Stream also will offer for the first time mobile access to 50 specialty audio channels from Horsham-based Music Choice. It will also offer polished, popular features including on-the-go viewing and remote programming of DVR recordings, on-demand access to more than 40,000 movies and TV shows, and "thousands" of choices available for downloading and viewing on a device where connectivity is slow or nonexistent.

For voracious mobile viewers willing to pay the freight, Verizon Wireless announced for the first time in six years its phone subscription plans with "unlimited data" built in, priced at $80 for a single-user subscription. It's a decent deal for heavy streaming video users who regularly exceed their 5GB monthly data cap and suffer surcharges. A day later, T-Mobile counterpunched with an enhanced and cheaper version of its own, unlimited data deal. Not incidentally, both offerings will deliver video content in data-intensive high-definition form, rather than compressing it to a lower bit-rate standard-definition form. Users might not see much improvement on a phone screen, but certainly will on a larger, high-resolution tablet or computer display.

Living up to the Ray Davies tune "Everybody's in Show-Biz," both Facebook and Apple Music are now raising challenges to the likes of Netflix, Hulu, and YouTube by backing the production of original video content and making it more accessible to their base.

Last year, Facebook struck one-year deals with media companies and celebrities to create videos for its nascent Facebook Live feature. This year, those companies are saying that Facebook is more interested in developing exclusive, original, content, along the lines of scripted shows, game shows, and sports. This week, it announced that videos streaming on Facebook through a users' news feed will now start playing the soundtrack as you land or scroll past. (Do you prefer peace and quiet? You'll need to go into the Facebook settings to make silent movies the default.)

Also underscoring the social-media giant's enhanced agenda is a new Facebook video app for TV, rolling out soon to app stores for Apple TV, Amazon Fire TV, and Samsung Smart TV "with more platforms to come," said Facebook's announcement. "You can watch videos shared by friends or pages you follow, top live videos from around the world, and recommend videos based on your interests. You can also catch up on videos you've saved to watch later, as well as revisit videos you've watched, shared, or uploaded."

During the "Grammys" broadcast, Apple previewed the first show "Carpool Karaoke" (a spin-off of late-night TV host James Corden's running sketch) to be available to Apple Music subscribers in April as part of the $10-a-month fee. Other original videos, including scripted dramas and the reality TV series "Planet of the Apps," are also forthcoming, starting in the spring, said Jimmy Iovine, chief of the Apple Music service.

"There are a bunch of projects. We're in it," Iovine shared with a reporter recedntly, suggesting the evolution of the streaming-music service into more of a cultural platform "with video and other things I can't talk about."

Next stop, "Jersey Shore - Second Generation"?

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Tuesday, February 21, 2017

Funded by Telecoms, Civil Rights Groups Back Trump’s Plan to Kill Net Neutrality

Written by Lee Fang — Leading civil rights groups who for many years have been heavily bankrolled by the telecom industry are signaling their support for Donald Trump’s promised rollback of the Obama administration’s net neutrality rules, which prevent internet service providers from prioritizing some content providers over others.

The Obama administration’s Federal Communications Commission established net neutrality by reclassifying high-speed internet as a regulated phone-like telecommunications service, as opposed to a mostly unregulated information service. The re-classification was cheered by advocates for a free and open internet.

But now Trump’s new FCC Chairman Ajit Pai, a former Verizon attorney, is pushing to repeal the net neutrality reform by rolling back that re-classification — and he’s getting help not only from a legion of telecom lobbyists, but from civil rights groups.

In a little-noticed joint letter released last week, the NAACP, Asian Americans Advancing Justice, OCA (formerly known as the Organization for Chinese Americans), the National Urban League, and other civil rights organizations sharply criticized the “jurisdictional and classification problems that plagued the last FCC” — a reference to the legal mechanism used by the Obama administration to accomplish net neutrality.

Instead of classifying broadband as a public utility, the letter states, open internet rules should be written by statute. What does that mean? It means the Republican-led Congress should take control of the process — the precise approach that is favored by industry.

None of the civil rights groups that signed the joint letter responded to a request for comment.

It’s not the first time civil rights group have engaged in lobbying debates seemingly unrelated to their core missions, but in favor of their corporate donors. At a time when OCA received major funding from Southwest Airlines, the group filed a regulatory letter on behalf of the airline in support of Southwest’s bid to open flights at Houston airport. The NAACP, after receiving financial backing from Wal-Mart, helped the retail chain during its contentious bid to open stores in New York City.

Telecom issues, however, are a particular specialty. Last week’s letter was organized by the Multicultural Media, Telecom & Internet Council (MMTC), a group funded by the telecom industry that has previously encouraged civil rights groups to oppose net neutrality. MMTC in previous years reported receiving about a third of its budget from industry-sponsored events; its annual summit, which was held last week, was made possible by $100,000 sponsorships from Comcast and AT&T, as well as a $75,000 sponsorships from Charter Communications and Verizon.

MMTC, which acts on the needs of telecom lobbyists, has been accused of “astroturf lobbying” by creating the appearance of grassroots support for the industry.

The civil rights group opposed to net neutrality have employed several arguments against the proposal. In one filing made in 2010, the NAACP signed onto an argument from MMTC that net neutrality reforms were a waste of resources because the FCC should focus on “more pressing racial discrimination and exclusionary hiring and promotion practices of certain Silicon Valley high-tech companies.” In a separate filing in 2014, MMTC and the NAACP argued that reclassification would threaten the “fragile state of minority engagement in the digital ecosystem.”

While advocating against net neutrality, the organizations on the joint letter have raked in money from the telecom industry.

The NAACP, which signed letters opposing net neutrality both times the rule was proposed by the Obama administration, has named AT&T, Verizon, and Comcast as corporate fundraising partners. After the NAACP endorsed Comcast’s merger with NBC, Comcast disclosed that the NAACP was one of the the recipients of $1.8 billion in funds doled out to various community groups.

The Asian-American groups on the letter, including OCA and Americans Advancing Justice, have similar ties to the largest telecom firms. Verizon, AT&T, Comcast, and the National Cable & Telecommunications Association, a trade group for the telecom industry, are listed as members of the “Corporate Alliance” of donors funding AAJC. Comcast and Verizon sponsored OCA’s annual gala last year.

The National Urban League received $1.2 million from Verizon in 2014 alone. As the Center for Public Integrity reported, senior officials from AT&T, Verizon and Comcast have held positions on the National Urban League’s board.

Net neutrality activists are crying foul.

“Net neutrality is based on a communications law that guarantees vital nondiscrimination rights,” said Jessica J. González, the deputy director and senior counsel of Free Press. “This joint statement may seem innocuous but it actually endangers the communications rights that have empowered people of color to tell our own stories, organize for racial justice and earn a living online.”

“The Congress that tried to destroy net neutrality once would only weaken it with legislation that fails to adequately protect those it is meant to serve,” says Malkia Cyril, the executive director of the Center for Media Justice. She noted that the civil rights groups that signed the letter are now calling for putting the future of the internet “into the hands of a GOP Congress that just appointed white supremacist Jeff Sessions to be attorney general.”

Activists have expressed alarm at the pace at which Commissioner Pai has already axed reforms enacted by the Obama administration. In his first days as chairman, Pai rolled back an attempt to regulate overly expensive prison phone rates, got rid of the proposal to allow more competition for the cable box market, and blocked nine companies from providing low-income families with discounted high-speed internet services. Observers believe net neutrality is next.

But Kim Keenan, the president of MMTC, the group that organized the joint letter, has showered Pai with praise. “He is really focused on closing the digital divide. As an advocate, I feel so much pride that that it is a priority for his chairmanship,” Keenan told Multichannel News, a trade outlet.

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Monday, February 20, 2017

Old-Fashioned TV Still Drives the Music Business

Written by Joe Coscarelli — For all the whirlwind technological changes and crumbling barriers to entry in the music industry, some things sure have stayed pretty old school.

Yes, rap songs by scrappy upstarts can hit No.1 on the Billboard charts thanks to internet memes and an unfathomable amount of streams on services like YouTube and Spotify. And it’s true that unless you’re talking about Adele, CD sales and even digital downloads have plummeted, because why own anything that takes up space when you can stream on-demand either for free or a small monthly fee? These days, a casual fan taking a trip to the record store is an almost laughable idea.

And yet, for the biggest names in music, self-promotion hasn’t changed all that much since the days of the Beatles on “The Ed Sullivan Show.” More than an online radio takeover or guerrilla social media campaign, marquee televised events remain the quickest way to reach millions of mainstream listeners who might check out your music or even buy it (or, preferably, come see you live; more on that later).

Within a week of each other this month, two of the record industry’s biggest events of the year — the Super Bowl halftime show and the Grammy Awards — demonstrated the effect they can still have on an artist’s commercial success even at time when the idea of traditional gatekeepers seems archaic.

Here’s what the numbers tell us about the importance of TV to music. (All figures are courtesy of Nielsen.)

The Bumps Are Predictable and Big

More than 26 million people watched the Grammys on Sunday, when Adele beat BeyoncĂ© (and, we’re told, others) for the top honors, up about a million viewers from last year. Lady Gaga’s halftime performance had some 117.5 million viewers. Both are among the most popular television events of the year.

So it makes sense that at least a fraction of those people, even football fans, would be persuaded to seek out the music they heard, especially when it’s as easy as reaching for the phone (probably already in hand) or laptop and firing up Spotify or Apple Music.

Lady Gaga, who performed at both events, was the biggest winner. While her most recent album, “Joanne,” had been a modest seller since its release in October and had yet to generate a Top 10 hit, it leaped to No. 2 from No. 66 in the week after the Super Bowl. Each of her older albums also charted and she sold 410,000 downloads from her catalog in the week ending Feb. 9 — 75 percent of her total for the year so far, according to Billboard.

Most notably, “Million Reasons,” the one song from “Joanne” she sang at the Super Bowl, went from nowhere to No. 4 on the Hot 100 after having previously peaked at 52 last year. That took some savvy business maneuvering: In addition to an increase in streams, Gaga and her label, Interscope, dropped the price of the song on iTunes to 69 cents from the standard $1.29, and sold 149,000 downloads.

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Thursday, February 16, 2017

Musicoin: A Pay-per-Play Blockchain for Artists and Fans

Written by Amber Healy — Streaming numbers are out for 2016 and, no surprise, it remains hugely popular, making stars out of previously unknown artists and turning the CEO of Spotify into the most powerful person in music.

But are artists, established or just starting out, reaping the same rewards? Are they getting richer as the number of streams gets higher and higher? We all know the answer to that.

Enter Musicoin, a new entry into the blockchain-will-revolutionize-the-music–industry camp, but with a twist: In addition to simplifying all the rights, royalties and copyright information via the use of smart contracts that other blockchains designed for music have touted, Musicoin will allow fans to determine how much they pay per stream of a song and every last fraction of a payment will go directly to the artist.

The trio behind Musicoin – developers Isaac Mao and Dan Phifer and musician Brian Byrne, formerly of I Mother Earth and the podcast Brian Byrne’s Manifesto of Mistakes, all co-founders—believe marrying the sharing economy with direct-to-musician payments will give fans and artists alike something to sing about.

Mao first started thinking about a project in music when he designed a pair of Bluetooth headphones that would stream and save songs within the headphones themselves and their dedicated cloud. After a successful Kickstarter campaign, however, Mao realized the regulatory and royalty-related loopholes he’d be mired in should he try to bring that product to market. Like so many others, Mao felt there must be a better way.

He studied SoundCloud, Spotify and other streaming services and, in talking with musicians about his headphones and the struggles he anticipated having with them (he’s since stepped away from that technology), Mao turned his attention to licensing and royalties and trying to develop a way to put musicians in charge of both their payment from streams and more direct control of their licensing rights.

Musicoin, which launched on Feb. 10, will give musicians an iron-clad smart contract that can’t be modified by anyone without their direct knowledge and express permission; it will pay musicians every time their song is played; it will be a streaming service and it will incorporate a cryptocurrency not tied to any one nation’s currency making it universal and functional regardless of where users live.

Musicoin’s player has a central “atomic concept,” pay per play, in which users will be charged one “coin” per play, but they can also leave a tip for the artists if they’d like. For the time being, of course, no one knows how much a Musicoin is worth because it’s a new currency, but the team behind the platform anticipates it could start out at the equivalent of one US penny per stream.

“We can assign a percentage of a payment to different writers or collaborators. That’s a fascinating thing,” Byrne says. “If you’ve got four or five writers on a song, how does that happen? Do you assign it to one guy on his account and then he’s left to distribute it, which would add a whole layer of problems to this idea? Dan and Isaac addressed that. It’s something that’s going to be so helpful,” because the smart contracts developed by the artist will allow all payments to be divided instantly and immediately relayed to the rightful owners as soon as a song is played.

“You don’t need a trusted third party to do that work for you,” Phifer says. That is, however, something labels are currently responsible for. “We’re not suggesting at all that we’d replace all the value those different organizations bring, but there are some things we can do more efficiently through this process,” especially because musicians currently have to wait months for payment to arrive in checks that don’t always clearly and precisely detail how many streams—and the price per stream—are represented.

And, of course, there’s the question of whether artists are currently receiving all the royalties they’re owed and, if not, where the rest of the money is going.

A platform like Musicoin “gives artists much more direct control over what’s going to be paid and they can come up with their own agreements on what things are worth,” Phifer says.” I think that’s something we can do that would be much more efficient.” It will also allow smaller labels, focused on finding and developing new artists, to keep their attention tied there, instead of more managerial and bookkeeping-related tasks.

As for obtaining Musicoin, people can obtain the cryptocurrency through mining and verifying data or, eventually, by purchasing portions of a coin. Byrne asserts that, once a person has some currency, it’s very easy to use. (The current worth of Bitcoin is around $1,000 per coin.)

“If I can do this, being a bit of a technophobe, anyone can,” he says with a chuckle. “I’ve operated on four different exchanges. It’s just copying and pasting, from one wallet to another. That’s the most difficult thing I’ve had to do. It’s pretty basic and not a hard thing to figure out.”

The team, again, anticipates each play of a song will be worth the equivalent of a penny, but that wouldn’t stop other developers for creating modifications to the Musicoin platform to allow people to buy streams in bulk — $10 a month for unlimited streams, $5 for access to a full album for a set amount of time, etc. “The goal is the artist will be in complete control” of how much their songs are worth, Phifer says. Some songs might stay at one coin, while others, like a full symphony, could be charged a higher rate. Additionally, there will be nothing on the Musicoin side of things that require a musician to remove his or her entire catalog from other streaming services and reside only on Musicoin.

“I have music sort of everywhere, all over the place. I don’t know what it’s doing. I’ve looked into it several times,” Byrne says. “For me, even at my age and limited understanding of blockchain and smart contracts and cryptocurrency, there’s nothing to lose, just wait and see what happens. If it’s completely transparent, it’s a far better model to use than the one that’s telling me absolutely nothing.”

Musicoin went live on Feb. 10 and in the lead-up to the release, Byrne contacted his friends in the music industry, from artists to producers and managers. “The reception’s been really good,” he says. “I think 85-90% think it’s cool and want to be involved, but you do have the friction or pushback from about 10%. I’m more than willing to explain, as best as I can, that it really is working and I want to do something that’s going to get back to the cats I’ve spent most of my life with who are scratching their heads wondering why they’re not making any money.”

Phifer, Byrne and Mao are not keeping back any of the initial coins purchased or obtained through Musicoin. They don’t want to be seen as profiteering venture capitalists who throw out ideas, keep some coins for themselves and, if it doesn’t work, they’re off to the next project.

“We’ve become sensitive to the fact that blockchain is a very trendy topic these days,” Phifer says. “We’ve become sensitive that people might question our motives. We’ve made a decision that, despite the effort going into it so far, over the last five months or so, we’ve decided we’re not taking any allocation. It’s more powerful to say there’s no way you can look at this and say we’re going to get a bunch of coins and disappear.”

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Wednesday, February 15, 2017

Apple gets into the TV business, but denies they're buying up shows

Written by Jeff Baumgartner — Apple will use original series, including a new reality show called Planet of the Apps, to boost its subscription music business, company exec Eddy Cue confirmed this week at Recode’s Code Media conference.

Cue, Apple’s SVP of Internet software and services, said the original series is “one of the differentiating factors we can add to Apple Music. He said the music service now has more than 20 million users.

Apple is also setting the release of another original, Carpool Karaoke: The Series, which will also be distributed by Apple Music. Planet of the Apps, a series about apps and their creators features Jessica Alba, Gwyneth Paltrow, Gary Vaynerchuk, and, and is produced by Propagate Content chairman and co-CEO Ben Silverman, the former co-chairman of NBC Universal and Universal Media Studios, who joined Cue on-stage.

Last month, The Wall Street Journal reported that Apple was seeking to form a new business focused on high-quality original TV shows and movies and to start offering scripted content by the end of this year. But rather than using that strategy to go after OTT video giants like Amazon and Netflix, the content strategy is to center around Apple Music as it continues to grapple with rival music streaming service Spotify.

"We're not out trying to buy a bunch of shows, we're trying to do some things that are creative, that can, we think, move culture and that Apple is adding some value to" he said.

Cue said the move into original TV content doesn’t mean Apple is gearing up to buy a big media company like Lionsgate or Time Warner.

“We are trying to do something that’s unique, takes advantage of our platforms and that really brings culture to it,” Cue said. “Right now, we think we can do that with partners like Ben, and we don’t see that anywhere else.”

Last year, Apple hired former Time Warner Cable exec Peter Stern in a VP role focused on the company’s subscription services, including Apple Music.

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Tuesday, February 14, 2017

Facebook Dives into the Music Business becoming YouTube competitor

Written by Lucas Shaw — A parade of up-and-coming musicians from Universal Music took the stage at the Ace Hotel in downtown Los Angeles Saturday in a pre-Grammy Awards performance for a room full of the executives who will make or break their careers.

Talent bookers from James Corden's late-night show, marketing executives from top brands and executives from Spotify Ltd. and YouTube looked on. Sandwiched in between tables for Apple Inc., an imposing player in online music, and Pandora Media Inc., owner of the world's largest online radio service, sat executives from a new act trying to break onto the scene: Facebook Inc.

The world's largest social network has redoubled its efforts to reach a broad accord with the industry, according to interviews with negotiators at labels, music publishers and trade associations. A deal would govern user-generated videos that include songs and potentially pave the way for Facebook to obtain more professional videos from the labels themselves.

"We're hopeful that they are moving towards licensing music for the entire site," said David Israelite, president of the National Music Publishers Association, an industry trade group.

Facebook's interest in music rights is inextricably linked to its growing interest in video. Having siphoned ads away from print, online companies have recently targeted TV, which attracts about US$70 billion in advertising a year. While Facebook faces competition from Twitter Inc. and Snapchat Inc., its main rival is Google, and music is one of the most popular types of videos on Google's YouTube service. Facebook declined to make an executive available for an interview.

Licensing to music on Facebook would have huge ramifications for the music industry, which is fighting to grab a larger share of the money from online services. With nearly 2 billion users and a growing advertising business, Facebook could provide billions in new sales for the music industry.

Beyond the revenue gains, the music industry could use a deal with Menlo Park, California-based Facebook to exert more pressure on YouTube. Music executives have long assailed what they say is YouTube's lax approach to copyright enforcement — even though the video-sharing website is the most popular in the world for music, has catapulted many young artists to stardom and delivered US$1 billion in ad revenue to the industry last year.

An agreement with Facebook could also serve as a blueprint for deals with other social-media companies, like Snapchat.

On the other hand, providing Facebook users with another way to get music for free could disrupt the music industry's recent surge in sales from paid services like Spotify.

The talks with Facebook are complex, involving how to prevent copyright violations in user-generated videos, so a deal could be a couple months away or more.

Facebook has reassured the music industry that the company will police piracy and share ad sales. Music executives are also encouraged because Facebook in January hired Tamara Hrivnak, a well-liked former record executive who also spent time at YouTube.

Video consumption on Facebook has grown to billions of views over the past couple of years, as TV networks, news organizations and users experiment with the site much like they once did with YouTube. The results have encouraged Facebook to fund original videos, though those plans are still being developed.

For Facebook to obtain professional video — both music and otherwise — it may have to alleviate concerns about how clips will be presented. At the moment, most Facebook users see videos in their newsfeed, where a clip from a TV show may be followed by a baby photo and then a friend complaining about romantic frustrations.

Facebook must also finish a system to police copyright-infringing material akin to Content ID, the system used by YouTube. Videos on the site already feature a lot of music for which artists don't receive royalties — a major source of tension.

Shares of the Facebook fell 0.3 per cent to US$133.78 at 10:45 a.m. in New York. They closed at a record US$134.20 on Feb. 8.

Israelite speaks for many in the music industry when he expresses doubts about the latest online giant to come knocking on the door. Music executives blame large technology companies for using music to sell services and devices without properly compensating artists.

"Facebook is a very valuable company, making a lot of money, and in part because of the music on the site," Israelite said, adding the social network is protected by the Digital Millennium Copyright Act, the same law that can shield YouTube from responsibility for pirated material. "We are looking forward to being business partners with Facebook. If that doesn't happen, you'll see the situation turn very quickly."

After years of declining sales, the music industry is growing again thanks to the popularity of paid streaming services from Spotify and Apple. Label executives are reluctant to give their music to another free service for fear it could slow that growth.

The music industry has spent the better part of the last year fighting YouTube in the press, and trying to get laws changed so that the video-sharing service bears more responsibility for policing clips that infringe copyrights. The labels took up that fight just as they were negotiating new long-term licensing agreements with YouTube, hoping the pressure would at least result in more favourable deals.

"Facebook definitely has the size and scale, but the tribal nature of music preferences is different than a feed or news stories or cute cat videos," said Vickie Nauman, a music industry consultant. "To be successful, it will not only need to envision a great music experience but also have to navigate the web of label and publisher rights and relations. No small feat."

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Monday, February 13, 2017

Grammy Awards Show Offers a Glimpse into the Future of Music

Written by Adam Cruz — Sunday night gave rise to a lot of excitement as house music's own Louie Vega joined the list of Grammy nominees, in celebration of his 'Louie Vega Starring XXVIII' album nod. As the telecast kicked off, it was clear that the show would offer some clues about the future of music.

To get the petty out of the way and despite the technological advances that have brought us to the year 2017, The Grammy awards show was plagued with microphone mishaps, oddly-timed camera angles and cut off speeches. Even poor Shirley Caesar was "Steve Harvey'ed" as the telecast flashed a picture of gospel singer CeCe Winans with the name 'Shirley Caesar' underneath. #teamPettyLabelle

With that aside, the future of music offers further fusion of genres and styles. Even country music seems to be getting into the action with heavy-hitters Keith Urban and Carrie Underwood performing their new single "The Fighter," a clear fusion of electronic dance and country. To some, country music represents the last genre to dive into the EDM pool, but if Urban and Underwood are any indication, we might be seeing more country artists explore electronic dance in 2017.

Further to the point, Katy Perry and Ed Sheeran each performed their new songs, both of which offer a mix of rock, pop and Caribbean styles in a receptive music market. Sheeran performed the reggae flavored "Shape of You," but it was Perry that took genre-fusion even further, performing her latest "Chained to the Rhythm." To add that sure-fire credibility, she was joined on stage by Skip Marley, grandson of the late reggae great, Bob Marley. Considering last year's hits by Justin Bieber, Drake and Rihanna, it's no wonder that artists and labels in 2017 are already releasing Caribbean and reggae-inspired beats. Could reggae-meets-ragtime be in our future?

Beyond the new sounds, you can also expect to hear new politically-charged material in the New Year. From Katy Perry to A Tribe Called Quest, the industry is poised to release more political music as the Trump administration emerges amidst chants to RESIST.

During his televised speech, current National Academy of Recording Arts and Sciences president Neil Portnow perhaps said it best, stating that "the Recording Academy calls on the President and Congress to help keep the music playing by updating outdated music laws, protecting music education and renewing America's commitment to the arts."

It's worth noting that at the time of Portnow's speech, new FCC chair Ajit Pai is fast at work, dismantling net neutrality norms and canceling inquiries into concerns about phone carrier T-Mobile's 'binge' data deals. Given the current political climate, anxiety is building while the U.S. Copyright Office has yet to fully address the outdated language in the DMCA (Digital Millennium Copyright Act) - a point that Mr. Portnow was clearly trying to make.

Let's hope the industry and all of us can focus on remaining vocal about the causes that most concern us instead of being distracted by a pregnant belly, a profanity slip or a shout out to "black friends."

NY Times Mixes with Music to offer Spotify Premium FREE

Written by Music Business Worldwide — Spotify is in with a fighting chance of topping 50m subscribers in the first quarter of this year. And it’s just struck a deal which it clearly hopes will give it a shove in the right direction.

The New York Times today announced that new digital subscribers to its publication – who sign up for a one-year commitment – will ‘receive free, unlimited access to Spotify Premium’.

The special offer is available for a limited time to US residents who are not current subscribers to The New York Times or Spotify Premium.

The deal mirrors a similar bundle promotion which Spotify ran with The Times and The Sunday Times in the UK in 2014.

That offer, whose website remains live, enabled users to purchase a ‘Digital Pack’ 12-month subscription to the newspaper for £6 a week, including free unlimited Spotify Premium.

For $5 a week, subscribers to the new NYT promotion will receive unlimited access to and its mobile apps, plus unlimited access to Spotify’s catalogue of more than 30 million songs and two billion playlists.

“At The Times we are not only dedicated to helping our readers understand the rapidly changing world around them, but also to helping them live better lives,” said Meredith Kopit Levien, executive vice president and chief revenue officer, The New York Times Company.

“News and music have gone hand-in-hand since the early days of radio, and because personalization and curation are central to what both The Times and Spotify do so well, we created an experience for Times readers that gives them access to all the news and all the music that they want in one premier subscription.”

As covered in the NYT’s press release: ‘With an annual retail value of $120, a Spotify Premium subscription offers instant, on-demand access to more than 30 million songs at the highest audio quality – with zero ads.’

According to MiDIA Research, Spotify finished 2016 with 43m subscribers.

That means the company grew its paying customer base by three million subs in the last quarter of the year (Oct-Dec), having confirmed 40m subscribers in September.

In the previous six months, Spotify’s subscriber officially figure jumped by 10m (after Daniel Ek confirmed 30m subs in March 2016) – an average of 5m net adds in each of the period’s two quarters.

In other words, according to MiDIAs stats, Spotify’s subscriber growth slowed slightly in the final three months of 2016, despite an aggressive $0.99-for-three months promotion offered to new customers in multiple territories.

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Friday, February 10, 2017

5 music copyright issues to look out for in 2017

Written by Chris Cooke — While at heart a relatively simple concept, copyright law can quickly become a pretty complex thing, with all sorts of technicalities and jargon to navigate. Then there are the differences between different copyright systems around the world. As CMU Insights gets ready to present its latest masterclass – ‘The Key Developments In Music Rights’ – here are five bits of copyright jargon that have been very newsworthy in the last year.

1. Safe harbours
These have been the big talking point in the music rights community for a few years now, and topped the music industry’s lobbying agenda last year. The safe harbours basically say that internet companies whose customers use their networks or servers to distribute content without licence can’t be held liable for said customers’ copyright infringement, providing said companies have a system in place that allows rights owners to have infringing content removed.

The safe harbours – that sit in copyright law in the US and an e-commerce directive in Europe – originated in the 1990s, when internet companies pointed out that if they could be held liable for their customers’ infringement, and thus would need to monitor every bit of content a customer uploaded, that would prevent the roll out of internet services to a mainstream audience.

The music industry doesn’t object to the safe harbours in principle, just that companies like YouTube claim safe harbour protection, a fact that allows them to operate an opt-out rather than opt-in streaming service.

The fact that anyone can upload music to YouTube and – because of the safe harbours – it is the responsibility of the rights owner rather than the Google site to block or remove that content, means that it is hard for a record company to say, “right, that’s it, no more tracks on YouTube”.

The record companies and music publishers argue that YouTube has exploited that fact to secure much more favourable licensing deals from the music industry than opt-in services like Spotify. Despite the fact that YouTube arguably now competes head on with the subscription streaming services that pay way more money to the labels and publishers.

To that end, the music industry wants safe harbour rules rewritten so that user-upload services like YouTube no longer qualify. Despite safe harbours being reviewed Stateside, it seems unlikely that will happen there. However, the draft European Copyright Directive currently working its way through the law-making process does seek to increase the obligations of safe harbour dwellers of the YouTube variety.

2. Performer Equitable Remuneration
Copyright law provides copyright owners with a number of controls over their content – controls which can then be exploited for profit. But in addition to that, copyright law also often provides a number of ‘performer rights’, which give recording artists certain rights in relation to recordings on which they appear, even when they are not the copyright owner.

These are important because many featured artists assign the copyright in their recordings to a record label via a record deal, while session musicians are usually paid a set fee for their time and do not share in any resulting copyright or revenue that the label generates by commercialising their recordings.

Probably the most important performer right is Performer Equitable Remuneration. This is a rule that says that when a sound recording is exploited in a number of specific ways, any performers who appear on that recording are due remuneration at an industry-standard rate, oblivious of any contracts they may have signed with the copyright owner.

The way Performer ER works varies from country to country, but commonly where it applies any monies paid by a licensee that exploits a sound recording is split 50/50 – with half going to the copyright owner (probably a label) and the other half being shared between the performers, both featured artists and session musicians. The performers’ half will be collected by a collecting society and paid directly to the performers. In the UK, collecting society PPL handles all this, working for both labels and artists.

Performer ER generally applies when the ‘performance’ and ‘communication’ controls of the copyright are exploited, what are sometimes called the ‘performing’ or ‘neighbouring’ rights. So that would include radio and whenever recordings are played in public, at clubs, shops, bars, work places etc. It’s worth noting that for the record industry at large, this element of the sound recording copyright brings in relatively modest sums: 14% of recorded music revenues in 2015 according to IFPI. However, for some artists – and especially session musicians – Performer ER can be a key income.

A big debate of late has been whether or not Performer ER should apply to streaming income. Most people agree that a stream in part exploits the communication control of the copyright. But labels generally argue that the stream actually exploits the so called ‘making-available’ control – a sub-set of the communication control – and that Performer ER therefore does not apply. Many artists and managers do not agree.

3. Reversion Rights
When artists and songwriters – especially new talent – sign with a label or publisher, they often assign the copyrights in their recordings and songs (or elements of the copyright, in the case of songs) to said business partner, in return for an advance and investment.

That means the label or publisher becomes the copyright owner. The assignment may be for a limited period of time, after which the rights revert to the artist or songwriter, or it might be for ‘life of copyright’, which means the label or publisher will own the copyright until it expires.

Plenty of artists have assigned the rights in their early work to labels or publishers for life of copyright – in order to unlock investment – and then later regretted it. You can always try to renegotiate with your label and publisher and try and get some of your rights back, maybe by agreeing to re-sign once you have delivered all the recordings or songs due on first contract. But you can’t be assured said label or publisher will agree to that deal.

However, under US copyright law there is a ‘termination’ or ‘reversion’ right that says that, 35 years after you signed an assignment deal, you can end that arrangement and get your rights back. This was added to American copyright law in the 1970s so is only just coming into effect (because the period of time before the reversion right kicks in is longer for copyrights that had been assigned before the new right was introduced).

That means that the music industry is still working out quite how the reversion right works. Does it apply to recordings as well as songs? It depends on how you classify a record deal. And how do the formalities and limitations of the reversion right actually work in practical terms?

Though from a UK perspective the big question is this: what if you are a British songwriter who signed a deal with a British publisher under English law? The reversion right clearly doesn’t apply to your entire deal, but does it apply in the US? Which is to say can you claim your rights back just in America? Songwriters reckon “yes”, some publishes reckon “no”. Duran Duran took this issue to court last year and lost – though that case, and the wider debate, is not yet fully resolved.

4. Consent Decrees
Sometimes the music industry licenses directly and sometimes the music industry licenses collectively. Where collective licensing applies, collecting societies like PPL and PRS license on behalf of (more or less) all rights owners. A licensee does a deal with the society, which collects the money and distributes it to artists, labels, songwriters and publishers.

There are benefits to collective licensing for both rights owner and licensee, though when all record labels or all music publishers license as one, that can create competition law concerns, because the collecting society basically has a monopoly. If you’re a radio station, only PPL and PRS can license you (recordings and songs respectively), so if you can’t do a deal with them you are stuck.

To overcome these competition law concerns, some copyright systems apply extra regulation to collective licensing, possibly forcing mediation where rights owners and licensees can’t agree on royalty rates. In the UK that mediation happens via a court called the copyright tribunal.

In the US, the two big song right collecting societies – BMI and ASCAP – are regulated by these things called consent decrees, which were written in the dim and distant past, and which restrict BMI and ASCAP’s deal-making powers, not least by empowering the ‘rate courts’ to ultimately decide what royalties licensees should pay.

The music industry reckons that the consent decrees are now outdated and unfair, and drive down the value of the song catalogue. A particular gripe of the big publishers is that the consent decrees stop rights owners from picking and choosing what kinds of licensees BMI and ASCAP can license, which means anyone seeking to exploit the performing rights of a song copyright can demand a licence from the two societies.

The big publishers wanted to force digital services into direct deals – as has happened with Anglo-American repertoire in Europe – but the consent decrees say that picking and choosing isn’t allowed, the only way to stop licensing digital services through BMI and ASCAP would be to stop licensing everyone through BMI and ASCAP.

With this in mind, the publishers persuaded the Department Of Justice to review the consent decrees. But during that review they then failed to persuade the DoJ to actually make any changes. Meaning this debate is very much ongoing.

5. 100% Licensing
At the end of its consent decree review, not only did the DoJ refuse to reform the rules regulating BMI and ASCAP, it declared that under existing rules the two societies were obliged to operate a 100% licensing system. Some licensees had asked for this clarification during the review. BMI and ASCAP insist the DoJ got it wrong.

Many songs are co-written and therefore co-owned by different writers and publishers. In the US, a songwriter decides which collecting society to join, BMI or ASCAP, or the smaller SESAC or GMR. Collaborating songwriters may be members of different societies, meaning one song might be repped by both BMI and ASCAP, eg the former controlling 40% and the latter 60%.

Under the current system – called fractional licensing – for a licensee to play that song, they would need a licence from both BMI and ASCAP. But under a 100% licensing system the licensee could play the song with just one of those licences, paying 100% of the royalties to that one society, which would then be obliged to pass on whatever was due to the other society.

Under US copyright law, with direct licensing, such 100% licensing is the default position – any one co-owner can license on behalf of the other co-owners. However, agreements between collaborating songwriters to not do so, means that while that might be technically the norm, in practical terms it is not. Which – BMI and ASCAP argue – is why they must operate a fractional licensing system too.

BMI and ASCAP have pledged to fight the DoJ’s ruling on 100% licensing, respectively through the courts and Congress. And that process is very much underway.

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