CMU Daily 09.05.22: BMG welcomes US mechanical royalties increase, Pandora responds to comedy copyright lawsuits

BMG welcomes mechanical royalties increase in the US, regrets not speaking out sooner
BMG has put out a statement welcoming last week's deal between the US record labels and music publishers regarding the mechanical royalty rate paid on discs and downloads, commending the songwriters and songwriter groups who campaigned for a better deal, and admitting that it regrets having not spoken out sooner in support of those writers and groups.

The royalty paid to songwriters and music publishers from the sale of discs and downloads in the US is set by the Copyright Royalty Board, which reviews what the royalty rate should be every few years. In the US, it's usually record labels that secure the licences and pay the royalties for both discs and downloads, which means the record industry is actively involved in any CRB review of this particular royalty rate.

As the latest review got underway, the US National Music Publishers Association announced it had agreed a deal with the major labels which would see it and them propose keeping the royalty rate on discs and downloads unchanged at 9.1 cents per copy.

However, many songwriters hit out at that proposal, pointing out that the 9.1 cents rate was set in 2006 and, as a result of inflation, the value of that royalty had decreased over the subsequent fifteen years. And while discs and downloads might now be a relatively small revenue stream for the US record industry, for some artists and songwriters discs and downloads are still decent earners.

Some songwriter groups also argued that there were issues with the NMPA leading on any negotiations regarding this particular royalty rate, because its biggest members are the publishing wings of Sony, Universal and Warner, which are also the biggest customers of these mechanical rights licences via their record company divisions.

Based on growing opposition within the songwriter community, the CRB rejected the original NMPA/majors proposal. So last week they returned to the CRB with a new proposal that will see the song royalty rate on discs and downloads immediately increase to twelve cents and then increase on an annual basis in line with inflation.

Welcoming that development, BMG said in a statement on Friday: "The entire songwriter community owes a huge debt of thanks to those who fought for this increase in the face of the opposition of major record companies and indifference of music publishers. Thanks to them, songwriters will get an effective 32% rate increase on the current 9.1 cents a track mechanical rate for physical products and downloads in the US".

"Without their belief and commitment, the RIAA (representing record companies) and the NMPA (representing music publishers) would not have been forced back to the negotiating table", the statement went on. "Music companies have a duty to stand up for artists and songwriters. That is why BMG has put fairness at the heart of our agenda ever since we started business in 2008".

"We regret on this occasion that we did not speak out earlier and more robustly against an industry consensus that turned a blind eye to what has been a fifteen year pay freeze for songwriters", it added. "More broadly, this case again highlighted the dismissive approach of record companies toward songwriters who just a month ago entered a motion designed to exclude the vast majority of songwriters from benefiting from any rate increase".

"Thankfully, they have backed down", it concluded. "They could show further humility by following BMG's example in abandoning unfair and anachronistic controlled composition deductions which are solely designed to depress songwriter earnings. This episode should be a wake-up call for all those in the industry who fail to match fine words about the value of music with a concern for the people who actually create it".

BMG previously announced in 2020 that it was removing so called 'controlled composition clauses' from all the deals it has with artists on the recordings side of its business, including deals relating to the catalogues of recordings that BMG has acquired from other labels over the years. That clause allows labels to claim a discount on the statutory royalty rate on discs and downloads where the artist is also the songwriter.

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Pandora responds to comedy copyright lawsuits, dubs comedian rights agency a 'cartel'
Pandora has hit back at the lawsuit filed against it by a number of comedians over allegations that the streaming firm has not properly licensed all the rights in the comedy recordings that it has long made available.

A number of comedy performers - as well of the estates of George Carlin and Robin Williams - are involved in the litigation, arguing that while Pandora licenses the recording rights in the comedy performances it streams, it has never licensed the separate rights in the comedy material being performed. All the various lawsuits were grouped together in March.

In music, of course, streaming services secure two sets of licences for each track streamed. They license the recording rights from the record industry, and then secure licences for the separate song rights from music publishers and song right collecting societies.

However, with comedy, while recording rights are licensed via the deals done with those labels and distributors that own or manage comedy content, no licences have ever been secured for the separate rights in the material which, in copyright terms, would be classified as a 'literary work'.

Pandora actually used to acknowledge this gap in its licensing activities when it was directly listed on the New York Stock Exchange.

In their lawsuits, the various comedians noted how, "in Pandora's own SEC 10K public filing with the Security And Exchange Commission from 2011 to 2017 … Pandora admitted in its risk factors ever year that it performs spoken-word comedy content 'absent a specific licence from any performing rights organisation' and it has never obtained a licence for the underlying literary works for the sound recordings of spoken-word comedy content that it streams".

"Pandora further admitted", the lawsuits went on, "that it 'could be subject to significant liability for copyright infringement and may no longer be able to operate under [their] existing licensing regime'".

Pandora - and the other streaming services, which are also likely to be targeted by lawsuits of this kind - might point out that until recently there wasn't anywhere obvious to go to secure licences covering the literary works contained within the comedy recordings they were streaming.

They could have contacted each individual comedian, of course, but - the streamers might also argue - those comedians never indicated that they felt their rights were being infringed by the failure of streaming firms to get bespoke literary work licences.

This has all changed in recent years because of the launch of two agencies representing the rights of comedians and other spoken word performers in this domain - they being Spoken Giants and Word Collections. The latter is working with all the comedians that have sued Pandora.

In its formal response to the comedy lawsuits, Pandora very much takes aim at the comedy rights agency. According to Billboard, the streaming firm's legal reps write: "Word Collections' true business model is not that of a benign licensing agent or an advocate for comedians' intellectual property rights. It is that of a cartel leader".

That bold claim is part of an allegation that Word Collections seeks to violate competition law by creating a "monopolistic portfolio" of comedy rights that would result in the cost of streaming comedy content increasing "dramatically".

After all, Pandora's legal filing adds, until Word Collections came along, comedians seemed super fine with the way Pandora licensed their content, banking the royalty cheques they received and seeking more plays and listens on the platform.

"Comedians chose unilaterally to benefit from the royalties they were already receiving for the use of the comedy recordings and the added promotional and other benefits that the services gave them", Pandora's lawsuit goes on, "creating additional demand for their live performances and otherwise benefiting the comedians".

It remains to be seen if any of that tough talking works in court, though it seems unlikely that it will placate the growing number of comedians who are criticising streaming firms like Pandora for not properly licensing their rights - even if the comedians themselves weren't really aware there were literary work rights to license until relatively recently.

For the music community, Pandora's arguments that any sort of licensing collective is anti-competitive - and that creators should cash what cheques they get and enjoy the promo value of being streamed - are all very familiar. And no one's ever been placated by those arguments in the music community either.

As for how Word Collections and its comedy clients will respond to Pandora's claims, that remains to be seen, but legal rep Richard Busch told Billboard: "We have seen [the legal filing], we vehemently disagree with it legally and factually, and we will be responding appropriately".

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R&S Records welcomes tribunal ruling after dispute with former employee
The co-founder of R&S Records has welcomed a recent employment tribunal judgement in the UK that dismissed a claim made by a former employee of the independent label.

That ex-employee, Raj Chaudhuri, last year accused R&S and its co-founder Renaat Vandepapeliere of racial discrimination and unlawful dismissal, having parted company with the record label in September 2020.

In his legal claim, Chaudhuri said that his efforts to "diversify the label and the artists it worked with" had been hindered by Vandepapeliere knocking back many of the black artists he wanted to sign, knock-backs which - he had concluded - were "racially motivated".

After being dismissed by the label, Chaudhuri also sought payment of fees he reckoned were still due under his contract, which totalled £10,000.

In response to Chaudhuri's legal action, R&S told reporters at the time that its former team member had threatened to go public about Vandepapeliere's alleged "discriminatory conduct" if the label didn't pay up what he thought he was owed. That threat, it then claimed, amounted to "extortion or blackmail", and Chaudhuri's subsequent employment tribunal filing was therefore a malicious act.

A label spokesperson then added: "We have no intention of litigating this in the press and have every confidence that justice will prevail. We believe Mr Chaudhuri has done this in order to attack Mr Vandepapeliere in an attempt to sway him away from other legal proceedings, and cause the malicious damage that he threatened unless Mr Vandepapeliere gave into his monetary demands".

In a new statement this morning, the label announced that all the claims submitted to the employment tribunal by Chaudhuri were dismissed last month following a two day hearing in March.

It added that the judge hearing the case concluded that - as a freelance A&R for R&S - Chaudhuri was not, in fact, an actual employee of the label. Meanwhile, R&S mainly stopped working with Chaudhuri because of disagreements regarding the future direction of the business.

The basis of Chaudhuri's claim for £10,000 in unpaid fees was "unclear", but his threats to publish an open letter about the label if they weren't paid concerned the court, it went on.

Meanwhile, his decision to go public about the employment tribunal claim while that claim was 'sub judice' - so under judicial consideration and therefore prohibited from public discussion - possibly meant that the media which reported on the legal proceedings were in contempt of court.

The label also added that following the dismissal of the employment tribunal case in the UK, the authorities in R&S's home country of Belgium are now investigating a possible prosecution against Chaudhuri over the alleged blackmail.

Commenting on the recent judgement, Vandepapeliere himself told reporters: "I am delighted that the tribunal has dismissed all three claims brought by Raj Chaudhuri. Given our label's roster of artists, his allegations of racial discrimination always looked like a cover for his unwarranted demands for money".

"This last two years has been absolute hell for me and my partner Sabine, my family and the artists on our record label", he added. "My artistic policy for R&S Records has always been inclusive and Raj Chaudhuri knew that. He also knew that allegations of racism would have a devastating impact on me and my business. We would like to personally thank our loyal friends, fans and artists who have remained supportive throughout these very difficult times".

"Differences of opinion over music and artistic direction in a record label are one thing", he went on, "but to falsely label them as racism or racial inequality is wrong; it undermines the very fabric of tackling racism and makes a mockery of those who are genuinely fighting inequality".

"Dance music has always been about uniting people through the commonality and love of electronic music, regardless of ethnicity, colour, religion or sexuality", he concluded. "I have always been a champion and supporter of original artists. Signing an artist is about their talents; the music they make and produce - it's what the label stands for. As the tribunal judge found, my priority is, 'the integrity of the music R&S Records produced'".

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Copyright owners and ISPs in Sweden ally to simplify web-blocking
The entertainment industry and various internet service providers in Sweden have entered into an agreement to simplify the web-blocking process in the country and to lobby for clearer laws regarding such web-blocks.

When the music and movie industries in Sweden first started seeking web-blocking orders through the courts - ordering ISPs to block access to piracy sites and especially The Pirate Bay - there were long-running legal battles as some net firms pushed back at the idea that they should be blocking access to websites on copyright grounds. However, in the end the copyright owners prevailed.

Now many ISPs are collaborating with groups representing the music, movie, gaming and media sectors to make it easier to process web-blocking requests from the copyright owners.

Requests will still go through the courts, but parties on both sides have committed to exchange information early on in the process, which should make things easier and more speedy once the web-blocking paperwork is actually before a judge.

Torrentfreak spotted last week an update from the country's Rights Alliance confirming the partnership with the internet companies. The rights group also stated that both copyright owners and ISPs will also "jointly strive for new, clear legislation for administrative site blocking in Sweden".

Web-blocking has become an anti-piracy tactic of choice for the music and movie industries in those countries where such blockade are available.

ISPs often object to web-blocking when it is first proposed in any one country, although they usually fall in line eventually. However, in some countries - like Sweden - several years of back and forth in the courts were required before every net firm got on board.

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Bono and The Edge perform in Ukrainian bomb shelter
Bono and The Edge last night performed a 40 minute acoustic set in a bomb shelter in Kyiv, after accepting an invitation from Ukrainian president Volodmyr Zelenskiy.

The musicians played to around 100 people in a subway station currently being used as a shelter from attacks on the city. In a statement, the musicians said that Zelenskiy "invited us to perform in Kyiv as a show of solidarity with the Ukrainian people and so that's what we've come to do".

The set included U2 hits such as 'With Or Without You', 'Desire', 'Angel Of Harlem' and 'Vertigo', as well as a cover of Ben E King's 'Stand By Me' performed with Taras Topolia, frontman of the band Antytila, who recently also appeared on a remix of Ed Sheeran's '2step', while also fighting in the Ukrainian army.

During the performance, Bono told the audience that of all the great cities around the globe there was "nowhere in the whole world that we would rather be in today than in the great city of Kyiv".

"The people in Ukraine are not just fighting for your own freedom, you are fighting for all of us who love freedom", he said. "This evening, 8th of May, shots will ring out in the Ukraine sky, but you'll be free at last. They can take your lives, but they can never take your pride".

Various pieces of footage of the show recorded on mobile phones have already made it online, although it also appears that the set was being filmed for professional broadcast.

Bono and The Edge were later seen visiting sites around Kyiv, The Edge telling reporters - according to Sky News - "Musicians and poets and writers do have a part to play [in opposing Russia's attacks on Ukraine]. We work with our music and our words. We're not politicians. But we can speak to the horror of what we're standing in the midst of, and just say 'it's wrong'. So we're here to bear witness to it".

U2 reportedly met Zelenskiy before he became president of Ukraine, and his invitation to come to the country came after they sent him a poem set to music. That poem was also recently read by Speaker of the US House Of Representatives Nancy Pelosi during a St Patrick's Day lunch.

Watch Bono and The Edge perform 'With Of Without You' and 'Stand By Me'.

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Kendrick Lamar releases first track from new album
Kendrick Lamar has revealed the first track from his new album 'Mr Morale & The Big Steppers', ahead of that record's release later this week. That track is titled 'The Heart Part 5'.

The video for the track - directed by Lamar and longtime collaborator Dave Free - uses deepfake technology to morph Lamar into Kanye West, Will Smith, Kobe Bryant, OJ Simpson, Jussie Smollett and Nipsey Hussle.

Set for release on Friday, the album will be Lamar's last for Top Dawg Entertainment, and is a co-release with his own label PGLang. His first album since 'Damn' in 2017, it was announced last month.

Watch the video for 'The Heart Part 5' here.

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Posthumous Dr John album to be released later this year
The album that Dr John was working on at the time of his death in 2019 is set to be released later this year. Titled 'Things Happen That Way', the record has been completed under the guidance of his daughter, Karla R Pratt, and features a mixture of covers and original songs.

"In a mystical kind of way, Dad was looking back at the same time he was looking forward, while being present in each moment", Pratt tells Rolling Stone. "From a different vantage point and an older stage in his life, this album is truly his most intimate, with original songs as his 'curve balls'".

A legend of the New Orleans music scene, Dr John - real name Malcolm John Rebennack Jr - died after having a heart attack in 2019, aged 77. 'Things Happen That Way' was recorded in New Orleans in 2018, and features guest appearances from artists including Willie Nelson and Aaron Neville.

The album is set for release on 23 Sep. From it, this is 'I Walk On Guilded Splinters', featuring Lukas Nelson & Promise Of The Real.

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Daniel Ek says Spotify's "best days are ahead", despite tanking share price
Spotify's share price hit an all-time low last month, even though the streaming company confirmed that premium subscriber numbers went up two million in the first quarter of the year, despite the Joe Rogan debacle and the closure of its Russian service.

That's because the investor community remains nervous about Spotify, with recent growth levels below expectations, anticipated growth levels for the next quarter revised down in the firm's official statements, and a general concern about how subscription based digital content services will fare in the year ahead. The latter concern was added to by Netflix's announcement that it subscriber numbers went down in the first quarter of the year.

All of which is bad news for current Spotify shareholders. You know, like CMU. Yep, we still own our single Spotify share! Which we bought for $155.17 when the streaming firm listed and which is currently valued at $104.68. Good times!

But do you know who's still optimistic about the future of Spotify? Yes, that's right, Spotify boss Daniel Ek. And to prove it, he's just invested $50 million of his own money back into the company.

He tweeted on Friday: "I've always been vocal about my strong belief in Spotify and what we are building. So I am putting that belief into action this week by investing $50M in $SPOT. I believe our best days are ahead".

Let's hope so. We were hoping to at least buy a nice dinner with the profits from the eventual sale of our single share.

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