8Sided Blog

the scene celebrates itself

Video: Saving “Happy Birthday”

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Here’s a short video documentary on the sinuous story of that song everybody knows and sings and how overnight it went from being a Warner/Chappell cash cow to the public domain. The affair offers some insight into the often complicated worlds of music publishing and rights management.

For years, global music publisher Warner/Chappell claimed copyright of the “Happy Birthday” song, demanding payment for any public performance of it. Jenn Nelson tells the story of her four-year campaign to prove that the company did not in fact own the rights to the world-famous song, whose tune was composed by two sisters in Kentucky in 1893.



Previously: HERE and HERE and HERE,

Untangling Streaming’s Copyright Conundrum

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For publishers, purchases result in mechanical royalties that are paid by record labels, which must match their recordings to the associated songwriters and pay the publishers accordingly. In contrast, streaming royalties are paid by the streaming service, shifting the administrative burden to companies like Spotify. Both purchases and on-demand streams require mechanical licenses to be obtained from publishers. This is where Spotify appears to have problems — it does not have publishing licenses for all the songs it streams.

A key problem is the compulsory license used by subscription services. A subscription service doesn’t need to secure mechanical licenses from publishers in advance of adding their musical works to its catalog. It can send what’s called a notice of intent and simply pay the appropriate royalties. But it’s not quite that easy in practice.

Because record labels are not required to provide publishing information associated with their sound recordings, services don’t always know which publishers they’re supposed to contact and pay. The end result is an incomplete record of songwriting credits and publishers for tens of millions of tracks.

Major music companies, which have equity in Spotify, want the streaming space to grow and believe imposing damages “could trigger mutually assured destruction,” one industry participant told Billboard. That could explain why some publishers are trying to reach a resolution with Spotify through the NMPA that would deliver back royalties in return for foregoing legal action.

Here’s the thing about copyright law: historically, as new technologies come along, copyright has a lot of trouble dealing with them. And, typically, the pattern is that the industry freaks out and tries to stop the new technology, but eventually someone duct tapes on a new bit of copyright law to cover it. Unfortunately, this means that there are all these weird periphery sections of copyright law that are supposed to apply to specific circumstances, which then get made obsolete by later technological situations, and it leads to lots of confusion and anger… and lawsuits.

There is also a complex bit of copyright law, known as Section 115, which gives the specifics on compulsory licensing of mechanical licenses in certain circumstances, if certain rules are followed. But here’s the crazy thing: it’s 2016 now, streaming services have been around for years, and still no one’s entirely sure if Section 115 compulsories actually apply to them. It’s never actually been tested and many services (including Spotify) assume they do, but a potentially big question is whether or not they really do.

Spotify can (and likely will) argue that it complied with the rules required in Section 115(b) for a “notice of intention” in order to get the compulsory mechanical license. Basically, Spotify would argue that it did what is necessary to get a compulsory mechanical license when it was unsure of who held the publishing/songwriting rights on a song. If it actually did do this, {David} Lowery’s case may be dead in the water — though I’m guessing Lowery’s lawyers will argue that it failed in some aspect of properly using Section 115 — or, as mentioned above, that Section 115 doesn’t actually apply to streaming services. If Spotify did not actually follow Section 115’s rules, then Lowery’s case suddenly is a lot stronger. Similarly, if a court suddenly determines that Section 115 doesn’t apply… well, then a lot of streaming services are in serious trouble.

Make no mistake, people … we – the music industry – are at fault here. Our data is fucked and in some cases non-existent. We all know it.

Some labels / distributors don’t upload the relevant meta or do and it’s corrupt and thus this situation arises. We need a global rights database … we’ve needed one for years. It’s time for this to be actioned properly with full support from every corner of the business. Until now much of the industry has been a bunch of lazy bastards cutting corners or uploading bad data at the expense of our life blood – the artists. That is unacceptable. If the meta was there Spotify would pay.

And despite having blanket licenses in place we are letting the services we deliver to take the blame for our industry-wide tardy incompetence. It actually saddens me that of all the digital service providers {David Lowrey} could have chosen to go after he’s going after one that actually recognizes this fact and are actively trying to build one. If Spotify are found to be at fault here every DSP will be guilty of this without exception. But I believe the fundamental fault here lies with us, the industry. Not the service … and we have a collective responsibility to sort this out.

Blowing Up The Vinyl Boom

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Here’s a fascinating article from FACT on where the real problems lie in modern record manufacturing … to paraphrase James Carville, it’s the electroplating, stupid:

Electroplating, a process which involves coating the master lacquer in a metal layer to produce stampers, is time-intensive and requires highly trained personnel. Those who have learned electroplating are still a long way from being able to prepare the lacquer – the lengthy process requires a great deal of experience and expertise. Only then can it be guaranteed that the music sounds how it is supposed to sound. And all this has to happen quickly – when the music is cut to the lacquer, it can’t be stored indefinitely. A time period of over two weeks is considered to be problematic.

{Silke Maurer of Handle with Care, one of the largest production agencies for records:} “In the last four years, vinyl production has almost doubled here. That sounds super, but you have to take a closer look at how the numbers come together. In the same timeframe, the first run of a title has reduced nearly by half. That means more work for the press. The machines have to be reconfigured more often, which takes a lot of time. But the real problem is not in the pressing – the bottleneck is in the electroplating.”

Thus, having to constantly create new lacquers for short runs (as records – especially in the dance realm – don’t sell close to the numbers they did twenty years ago) in a process that is time consuming and takes expertise creates real headaches. Pain also comes from the constant recalibrating and readjusting of the pressing machinery to handle each new short run project. These machines are all over thirty years old, remember, with new models only now appearing in limited form.

And then, here come are those mustache-twirling major labels:

There was a gold rush at Sony and the other majors, and it’s hard to shake the feeling that the labels are trying to sell their archive a third time, this time to middle-aged buyers who can remember buying vinyl, naturally switched over to the CD, sold or threw away their old vinyl and aren’t completely happy with streaming today. A look at the vinyl section of a large Berlin store proves the shelves are full of reissues of old titles, mostly from major labels. Record players can be purchased right at the checkout. There’s nothing wrong with that – music should be sold in the formats that meet customer demand. But there are indicators that the majors are actively trying to secure substantial vinyl production capacity at the remaining pressing plants. How? By paying in advance. There might even be presses completely reserved for certain companies. That techno EP can wait – Led Zeppelin can’t. In the course of researching this article, we received emails that confirm such requests by the majors.

If this is the case – and the pressing plants are denying it – it would mean that the majors are attempting to buy their way into an industry that they played a significant role in destroying. And they are attempting once again to starve the indie labels, the very labels that never gave up on vinyl. On Record Store Day, when the shops are full of specially-made vinyl records and customers wait in line for these limited editions, the pressing plants have already had many hard weeks of work leading up to it. Who knows how many machines were quickly patched-up in lieu of a proper repair? Nobody has time to take a breath. The next releases are already on standby, and the machines continue to run at a furious pace.

Related: Columbia House To Relaunch With Vinyl

Spotify Hit With $150 Million Class Action Over Unpaid Royalties

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Camper Van Beethoven and Cracker frontman David Lowery, retaining the law firm of Michelman & Robinson, LLP, has filed a class action lawsuit seeking at least $150 million in damages against Spotify, alleging it knowingly, willingly, and unlawfully reproduces and distributes copyrighted compositions without obtaining mechanical licenses.

The lawsuit comes amidst ongoing settlement negotiations between Spotify and the National Music Publishers Assn. over the alleged use of allowing users to play music that hasn’t been properly licensed, and also without making mechanical royalty payments to music publishers and songwriters. According to sources, Spotify has created a $17 million to $25 million reserve fund to pay royalties for pending and unmatched song use.

The complaint states that Spotify has “publicly” admitted its failure to obtain licenses and created a reserve fund of millions of dollars for royalty payments which have been “wrongfully withheld from artists.” The complaint further notes that statutory penalties allow for judgments between $750-30,000 for each infringed work, and up to $150,000 per song for willful infringement.


I admit I’m not the biggest David Lowrey fan in this sphere, but any eyeglass pointed at artist royalty in these early days of streaming is important as it may help interpret and set future policy. If Spotify is knowingly withholding royalty that can be remitted then most certainly they should pay up. However, I’ve heard of reserve funds being held by other services until rightsholders can be identified, most notably by SoundExchange (though they aren’t actually transmiting the compositions themselves), so the practice may not be as outlandish as the suit implies. One can also assume that if Spotify is doing this with regards to mechanical licensing then Apple Music, Tidal, etc. are probably doing the same … ?

Update:

Spotify is currently in the middle of a settlement with the National Music Publishers Association, after being sued for failing to accurately keep track of royalty payments. In a blog post last week Spotify admitted that it had a problem managing royalties, and that it would work with the NMPA to build a “comprehensive publishing administration system” to ensure artists and publishers are properly compensated.

If the NMPA opts into the settlement, which allows publishers to request royalty payments in exchange for dropping legal claims over licensing fees, it will likely weaken Lowery’s case.

Empire Building: Vinyl Edition

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The Dallas Morning News:

[Josey Records managing partners Waric] Cameron and [Luke] Sardello say they approached [vinyl pressing plant owner Stan] Getz about buying A&R in July. They’d known him for years, having run dance-music labels of their own in the mid-1990s; like every local label, they had to get their records pressed at A&R, especially since the CD essentially killed the vinyl industry by the early 1990s and the nearest facility is now in faraway Salina, Kansas.

As recently as five years ago, buying a record-pressing facility might have been considered a dreadful investment unless you also had a time machine to go with it. Yet sales of records continue to climb: According to figures provided by the Recording Industry Association of America, more than 13 million LPs were sold in the U.S. alone in 2014. Numbers haven’t been that high since 1990.

“The business of vinyl is an old business model, and it’s the one that has survived everything,” Sardello says. “Vinyl has survived streaming, and not only has it survived, it’s thrived. It’s up 40 percent each year. So what else is there to detract from it? It’s never been easier to access music, and yet vinyl is as strong as it’s been for the last 25 years.”

At the same time, they will begin opening other Josey Records stores: Cameron says he wants to have six to 10 more outlets in the next two years in “major metropolitan areas,” including San Antonio.

“The thought was always vertical integration,” says Sardello, “We started thinking about bands. We started thinking about a label. We started thinking about a studio. We started thinking about more stores and how we can work with bands and labels and go from pressing your records to distributing our records to putting them in our stores to sending your band on a store tour.”

Kudos to these guys, who I’d met on and off back in my DJ’ing days. The lede buried in the main story, but that I highlight above, is the plan to eventually cover the manufacturing, distribution, and retail stages of releases under the company operation. This is the strategy major labels used to dominate in their heyday, so it’s interesting to see an independent upstart take on similar goals. Of course the elephant in the room is that today’s ‘physical product’ climate is much different (despite comparisons), and the majors themselves no longer follow this process – acquiring equity in streaming services, in hopes to somewhat replicate the traditional food chain, seems to be the current major label modus operandi. So it’s a gusty move to pin such high aspirations on a format with an unpredictable shelf-life … vinyl’s extended perseverance is an optimist’s hope. But, as I join in optimistically rooting for vinyl, I’m also rooting for Josey, and we certainly need more gutsy maneuvers like this in the independent music biz. Rock on.