David Israelite: The Music Modernization Act Marks a New Era for the Music Industry

October 23rd, 2018 by Amy Lee

9/26/2018 by

The Senate’s passage of the Music Modernization Act (MMA) is a milestone by any measure. It is also just the beginning.

To put into perspective how astounding the MMA’s progress has been, first note that the MMA is the only music bill that has ever passed unanimously in United States history. Not only did the bill pass the House of Representative and Senate without one dissenting vote, it did so in an area where no compromise has been found in decades.

The MMA process began 12 years ago when piracy was the biggest threat to the music industry. The 2006 Section 115 Reform Act (SIRA) contained the same fundamental compromise that exists within the MMA — the ability for digital services to license legally all music and the assurance that all songwriters and copyright owners will be paid properly. That effort brought together songwriters, publishers, artists, record labels and digital services, but unfortunately it fell short of becoming law. The goal was not lost however, and it led to the effort that became the MMA.

This was not easy — and by no means did it happen without strong disagreements — but it does prove that progress is possible when everyone has something to gain and all parties have more to lose without meaningful compromise.

The amended version of the MMA that passed the Senate has now been reapproved by the House and is on its way to being signed by the President. While it’s appropriate to take some time to celebrate this achievement, it’s also not too soon to think about what’s next.

The next step after the President’s signature is the promulgation of regulations — essentially the federal government will determine the parameters around the many concepts in the MMA and how they will play out. The groups involved in getting the MMA signed into law will be laser focused on ensuring that the rules put in place are fair and transparent.

Next, we will focus on the creation of the Mechanical Licensing Collective (MLC) which will be the central hub from which streaming services will obtain permission to use the millions of songs found on their platforms, and through which songwriters will be paid. This includes identifying, nominating and electing the members of the MLC’s board and developing bylaws and processes that will govern the collective.

Finally, the most important step will be the engagement of the music community in standing up and supporting the mission of the MLC. Never before have we committed as a unified community to delivering an open, accessible database to ensure musical work owners are paid and information — and the royalties stemming from that information — is not lost. This is a problem that has plagued our industry since its beginning and this is the year that we as a community work together to fix it.

The challenge of matching sound recordings to musical works and copyright ownership will not be solved overnight, but it can be solved. The only way to do this is with the knowledge and commitment of everyone involved. American music has given the world an incalculable cultural contribution, but the people creating that music have never seen the fair fruits of their labor.

Speaking of those individuals, while the MMA becoming law is meaningful for everyone from songwriters to legacy artists and engineers, the process by which it happened is in many ways more meaningful.

Music’s creators — historically less involved in the business and politics of Washington — have found their voice. In a town traditionally dominated by publishers and labels, lawyers and lobbyists, what is exciting is that the most powerful advocates have become the songwriters and artists.

Their grassroots movement was galvanized through the MMA — championed by the Nashville Songwriters Association International (NSAI) and the Songwriters of North America (SONA) and individual creators like Ross Golan, Ryan Tedder and Paul Williams who unleashed a righteous fury that is unprecedented. Calls to arms spread like wildfire and everyone from composers to major artists got involved and educated. The power of that creator army overwhelmed and outfought the powerful interests who opposed the MMA.

The MMA does not solve every problem in the music industry. There will always be more work to do. But the MMA proves that not only is it possible to enact transformative reform in an age and area of disagreement, but we will be working hand in hand with the creators who will benefit most from it.

Today marks a new era. An industry that was used to fighting internal battles has now become a unified force to be reckoned with.

David Israelite is the President & CEO of the National Music Publishers’ Association (NMPA) — the trade association representing U.S. music publishers and songwriters.

Link to article can be found here.

 

President Trump Signs Music Modernization Act Into Law With Kid Rock, Sam Moore As Witnesses

October 23rd, 2018 by Amy Lee

How sweet it is.

At long last the Music Modernization Act was signed into law today by President Donald Trump, witnessed by a smattering of industry executives and such recordings artists as Kid Rock and John Rich, the president’s besties.

After an effort that began years ago and was renewed last year, the compromise legislation, which ultimately took much more compromise than the initial version of the bill anticipated, will present a whole new set of business conditions on the music publishing industry that hopefully will be worth with the reward of higher rates for songwriters and publishers.

“The Music Modernization Act closes loopholes in our digital royalties laws to ensure that songwriters, artists and producers receive fair payment for licensing of music,” Trump said just before signing the law. “I’ve been reading about this for many years and never thought I’d be involved in it, but I got involved in it. They were treated very unfairly. They’re not going to be treated unfairly anymore.”

Trump-friendly artists in attendance included Kid Rock, Beach Boys singer Mike Love and country singers Craig Morgan and John Rich. The ceremony was also attended by Christian rock group MercyMe and Doobie Brothers guitarist Jeff “Skunk” Baxter, who has gone on to a career as a missile defense consultant. Another artist expected to be at the White House, Kanye West, was nowhere to be seen.

Soul legend Sam Moore of Sam & Dave noted that the legislation has been a long time coming. “With Mr. Bush we couldn’t get it done. When Mr. Obama was in we couldn’t get it done. But we got it done with this man,” the “Soul Man” singer said in brief remarks.

“The Music Modernization Act is finally the law of the land,” National Music Publishers Assn. president and CEO David Israelite said in a statement. “Songwriters have for too long labored without seeing fair rates and receiving all that they deserve, and for the first time in history, the music industry has partnered with the tech industry to fix these systemic problems. As we embark on supporting and helping build the critical structures within the MMA, we are humbled by the extraordinary progress propelled by compromise and the unprecedented political involvement of music creators. Today is about their future and this bill stands as a great statement on what can be done when we work together.”

Another component of the bill, the Classics Act, will finally make sure that artists with pre-1972 records will receive master recording performance royalties; while a third component codifies a process by which SoundExchange can pay producers and engineers the royalties accorded to them by their agreements with artists.

“The Music Modernization Act is now the law of the land, and thousands of songwriters and artists are better for it,” RIAA president Mitch Glazier said. “The result is a music market better founded on fair competition and fair pay. The enactment of this law demonstrates what music creators and digital services can do when we work together collaboratively to advance a mutually beneficial agenda. It’s a great day for music. We hope fans across the country will join with us in celebration and PLAY IT LOUD.”

Recording Academy president and CEO Neil Portnow likewise applauded the signing of the legislation. “As we celebrate the harmony and unity that got us here, we applaud the efforts of the thousands of performers, songwriters, and studio professionals who rallied for historic change to ensure all music creators are compensated fairly when their work is used by digital and satellite music services,” he said in a statement. “We thank the members of Congress who championed this issue throughout the past several years to bring music law into the 21st century.”

But once the bill is signed the real hard work begins, especially with regards to the music publishing portion of the law. In addition to changing some standards by which songwriting royalty rates are set by the Copyright Royalty Board and the ASCAP and BMI rate courts, the MMA creates a blanket mechanical license and a collective to oversee  that process and administer the collection, payments and reporting to songwriters and publishers.

“The signing of the Music Modernization Act into law, by the President, is the culmination of a gargantuan struggle that was resolved by an unparalleled alliance between all music industry stakeholders and the relevant tech companies,” A2IM CEO Richard Burgess said in a statement. “In this digital age, more music is enjoyed by more people than at any time in the history of humankind. The signing of this bill represents a significant step towards better lives for music creators and those that support them. A standing ovation is greatly deserved for all involved in this historic achievement.”

Yet, sources have been suggesting to Billboard since the beginning of the effort to get the MMA passed that now the real infighting will begin over the set-up and regulations.

Moreover, the collective is supposed to build an industry-wide, comprehensive public database that will match compositions to recordings, an ambitious undertaking that has yet to be successfully completed in past industry attempts.

Furthermore, for the first few years of the MMA collective’s operation, the administrators that expected to lose business as a result of the legislation — like Music Reports Inc., the Harry Fox Agency, Audiam and others — will probably enjoy a boon in business as the publishers that can afford it will likely hire them to double check the Collective to make sure it is accurately doing its job, sources says.

“Today, President Trump signed the bi-partisan Hatch-Goodlatte Music Modernization Act (The MMA), which will finally bring music copyright laws into the digital age,” according to a statement issued by John Josephson, chairman/CEO of SESAC, which owns HFA. “We applaud everyone’s hard work and tireless efforts on this legislation, especially the Senators who worked diligently to get the bill passed then adopted by the House. We’re grateful for our committed songwriting and publishing community whose focus and passion have strengthened our industry for generations to come.”

“With today’s signing of the Music Modernization Act, we mark a historic accomplishment,” remarked Michael Huppe, SoundExchange’s president and CEO. “But more importantly, we mark what it means. For creators, it means getting paid more fairly. For those who recorded music before 1972, it means assurance you’ll get paid for your work. For songwriters, publishers and producers it means making the digital economy work for you. SoundExchange’s 170,000-member community was a driving force in getting the bill from the halls of Congress to the White House. When the music industry speaks with one voice, Congress listens.”

As part of the legislation, rate regulators now have to consider the marketplace and try to duplicate a willing buyer/seller standard when setting rates. Moreover, the legislation gets rid of two elements of copyright law that songwriters and publishers felt were depressing rates, “pre-existing services” that received special considerations when rates are being set; and not being able to cite the rates being paid to record labels and artist. By eliminating both rules, the rate regulators can now consider how much record labels are being paid when setting music publishing rates.

“A young songwriter once wrote, ‘You give a little love and it all comes back to you; You’re gonna be remembered for the things that you say and do, ASCAP chairman/president and songwriter Paul Williams said in a statement. “Decades later, this could not be more true. Songwriters across this country now and in the future will remember those who fought so hard for the Music Modernization Act—both in Congress and across the music industry. On behalf of the music community, we are so thankful for the love and will return the favor with music for generations to come.”

Those sentiments were echoed by songwriter Ross Golan. “The music industry’s past was built on the backs of artists and songwriters,” according to a statement from Golan, a member of Songwriters of North America. So it’s fitting that artists and songwriters are carrying the industry into the future. We are no longer the exploited sleeping giant. We are here and we are organized. We were told uniting songwriters is like herding cats. Well we did and now we are a Pride of Lions.”

Along the way, when some industry parties were complaining to Congress because the MMA would likely hurt their business models, SONA and the National Songwriters International Assn. members bombarded social media, calling them out and putting pressure on them to get on board. However, it was the Congressional leadership that knocked heads together and made all parties sit down and enact further compromises to the bill.

While songwriters are expected to enjoy better payouts from the law, on-demand services derive a huge benefit too in that the blanket license insures that they won’t be hit with copyright infringement lawsuits if they follow the rules correctly.

In a statement Spotify applauded the legislation, calling the way it previously had to do business as outdated. “One of our core missions at Spotify is to enable a million artists to make a good living from what they love: creating and performing music,” Spotify’s general counsel and VP of business & legal affairs Horacio Gutierrez, said in a statement. “The Music Modernization Act is a huge step towards making that a reality, modernizing the outdated licensing system to suit the digital world we live in. The MMA will benefit the music community and create a more transparent and streamlined approach to music licensing and payment for artists.”

The inability of the services themselves, and in some instances the administrator they higher, had resulted in some very high profile and very expensive lawsuits over unpaid royalties from the services. Most of those suits have been settled, but Spotify still has to wrestle with a $1.6 billion suit filed by Wixen Music Publishing in the last days of 2017.

Since the MMA precludes copyright infringement lawsuits being filed—if digital services abide by all the rules and regulations that are set forth by the collective — and is retroactive back until Jan. 1, 2018, Wixen had to rush to file its lawsuit, which is still outstanding. Beyond that, industry sources expect this portion of the bill to face further legal challenges.

In another change, going forward the PRO rate courts will be rotated among the Judges of the U.S. Southern District of New York, Previously, all cases were heard by BMI rate court Judge Louis Stanton and ASCAP rate court Judge Denise Cote.

“Thanks to the unrelenting efforts of our ASCAP music creator and publisher members, industry partners and champions in Congress, a more sustainable future for songwriters is finally within reach,” ASCAP CEO Elisabeth Matthews said in a statement. “The MMA’s unanimous passage in the House and Senate proves that the power of music is a great unifier. ASCAP is gratified to have stood alongside creators, music publishers, and many more to make this dream a reality.”

Added BMI president and CEO Mike O’Neill: “This is truly a historic moment for the music industry, especially for the American songwriters and composers at its core, who will see significant and deserved benefit from this legislation. Passage of the Orrin G. Hatch-Bob Goodlatte Music Modernization Act was a hard-fought process that hinged on tremendous collaboration and unprecedented support among diverse stakeholders who ultimately united to safeguard the future of music. We are gratified by this extraordinary outcome that recognizes the essential contributions of creators and streamlines the use of their music across businesses. While BMI will keep advocating to protect the livelihood of music creators in the digital age, we thank Congress and the President for taking this important step in implementing the most meaningful music licensing reform in decades.”

Likewise SONA executive directors Michelle Lewis and Kay Hanley noted in a statement, “SONA and its membership of working songwriters would like to express heartfelt thanks to Congress and to our fellow music business stakeholders for accomplishing what everyone thought was impossible: Compromise, consensus, and passage of the Orrin G Hatch – Bob Goodlatte Music Modernization Act.  As President Trump signs our bill into law, today marks another momentous event in the rich history of music and the people who create it.”

In fact, getting President Trump to sign the legislation was the last hurdle for the MMA to become law of the land. A minority of industry executives were worried that the president, known for his vindictive streak, might hesitate to sign the legislation if he was reminded that songwriters and artists were largely against his election in the first place; and that rights holders have a tendency to cry copyright infringement when a Republican politician uses their music in their campaigns.

However, others pointed out that even if Trump vetoed, the legislation, which passed with unanimous bipartisan approval by both Congressional bodies could easily muster enough votes to override any last minute stubbornness by the president.

In the end he did sign the legislation, and as lawyer and SONA advisor Dina LaPolt noted in a statement, “Music’s unifying power helped opposing communities reach across party lines to pass the Music Modernization Act with unanimous congressional support. The President’s final signature now enshrines the MMA in U.S. law, protecting music creators for generations to come. I couldn’t be more proud of SONA and all the songwriters who engaged the entire music creator community to help get this over the line!  Now the real work begins!”

True that, onward to setting up the Collective.

Link to article can be found here.

Alicia Keys Wins Icon Award, DOJ Antitrust Boss Calms Nerves at National Music Publishers’ Meeting

August 7th, 2018 by Amy Lee
Along with good financial news for songwriters and publishers, the annual National Music Publishers Association meeting in New York on Wednesday delivered two other big headlines. First, Alicia Keys received the organization’s Songwriter Icon award and used her moving speech (read it here) to announce a pro-female collective called She Is the Music. But also, after some alarmist speculation earlier in the week regarding the event’s keynote speech from U.S. Assistant Attorney General for the Justice Division Makan Delrahim and what it might indicate about the future of the 75-year-old consent decrees that govern ASCAP and BMI, he calmed nerves by saying, “We recognize the industry has grown up around [the decrees], and we should not take any action lightly or without due care and consideration.”
Delrahim — who was in headlines earlier this week after the Supreme Court approved the AT&T-Time Warner merger, which the DOJ opposed — took his time in getting to that point, and one could feel the several hundred publishing executives in the room leaning forward each time he seemed to be leading up to it. (Read his entire speech here.) ASCAP and BMI have been governed since the early 1940s by separate but similar consent decrees designed to stimulate competition, prevent monopolistic behavior and set royalty rates. The decrees were designed for the then-new broadcasting industry; they were last updated in 2001. Notwithstanding the monumental changes in the music world over the past 17 years — let alone the past 75 —  the decrees arguably place the two dominant U.S. performing rights organizations at a disadvantage against competitors like SESAC and Global Music Rights, which are for-profit and not bound by such rules. (Anyone seeking more information on consent decrees, knock yourself out.) The two organizations have long argued for a free-market model and the gradual phase-out of the decrees — and while Delrahim has a long history in the world of patents and copyright, he is also a Trump appointee who has lined up hundreds of consent decrees across many businesses for examination, and there was some concern about overly drastic action.

Thus, when he announced “we should not take any action lightly or without due care and consideration,” there was a collective exhale across the room.

Delrahim concluded by saying: “To be clear, the Antitrust Division has not reached any conclusion about whether the ASCAP and BMI decrees strike the best balance among competition, innovation, and regulation. Congress, moreover, is also paying proper attention to the industry. It is taking a hard look at the Music Modernization Act, and we look forward to seeing that legislation enacted and the results of those changes, which have involved several years of process and input from various interested parties.

“I can say with confidence, however, how we approach that question. You’ve heard tonight the principle the Division adheres to: protecting competitive markets in which innovation and consumers thrive. I also hope you understand from my remarks tonight the passion and respect I, and the Division, have for this industry. That principle, and that passion, will define our approach to the decrees and to antitrust enforcement in the music industry.”

During his presentation, NMPA CEO David Israelite (pictured above with Keys) painted an optimistic but realistic picture of the current state of the publishing industry. “It is a period for the music-publishing and songwriting industries with probably more disruptions but also more opportunity than I’ve ever known,” h said. “Despite that, I’m very pleased to tell you today that the state of the industry is very strong.”

He presented charts showing that in 2017, U.S.-based songwriting and music-publishing revenues was $2.957 billion — a year-over-year increase of 10.3%, and a 37% growth over the past three years, after many years of decline.

Another chart showed that 54% of that 2017 revenue came from public performance (primarily airplay and live concerts), while just 18% came from mechanical royalties (physical product and other sales), and noted that number had dropped from “around 60%” at the beginning of his career around 30 years ago. And of that 18%, half of it came from the percentage of streaming that is considered mechanical; the small remainder came primarily from the sale of physical product and downloads.

Israelite also pointed to victories with the Copyright Royalty Board, which will lead to a minimum of a 44% increase in the interative streaming rates through 2022; a BMI-led court victory allowing fractional licensing; and licensing deals with Facebook.

“It’s an incredible turnaround story. The publishing industry is a little behind the record industry in terms of growth numbers, but the last three years demonstrate that we’re in a very strong state.”

Also during the ceremony, outgoing Carlin Music CEO Caroline Bienstock — who took over the company from her father, Fred, one of the greatest music publishers of the 20th century — which was sold to Round Hill earlier this year for some $240 million. In presenting the award, longtime Famous Music chief Irwin Robinson called her “a brilliant businesswoman who is fearless in expressing her point of view.”

Nashville Songwriters Association International executive director and Capitol Hill bruiser Bart Herbison — whom Sen. Orrin Hatch once affectionately called “a pain in the ass,” arguably the greatest possible compliment — was honored for the changes he led in copyright law, and longtime songwriter advocate Sen. Sheldon Whitehouse — who was in Washington for votes — accepted the Presidents Award with a video message.

Finally, after a stellar performance of Keys’ “If I Ain’t Got You” by Chris Blue, “The Voice” winner she’d coached, the evening’s big honoree took the stage. Keys delivered a 10-minute acceptance speech that was, to paraphrase Sly Stone, both thankful and thoughtful. She thanked Kerry Brothers — her songwriting collaborator “since back in the dizzay”; her “magnificent publisher,” Universal Music Publishing CEO Jody Gerson — “who’s been with me since I was 14!” and former EMI chief Marty Bandier; longtime engineer and “brilliant entrepreneur” Ann Mincileli, her first manager Jeff Robinson, her “beautiful mother,” her “most magnificent, amazing husband Kaseem Dean (a.k.a. Swizz Beatz) “who has taught me everything about dreaming in color,” and finally everyone at NMPA. You can read her moving speech right here, but the pertinent section follows:

“I’ve joined forces with a group of really powerful female executives, songwriters, artists, engineers, producers and publishers to help reshape the industry that we all love by creating real opportunities  and a pipeline of talent for other women,” she said. “We’re calling our initiative She Is the Music. We want to create a model for change that effects women across all industries. We deserve the utmost respect, and so many of these women across industries are telling our culture that time is up on double standards, and it is it’s over for pay inequity and colleagues who are at best disrespectful and at the worst unsafe — so it’s over for that.”

VARIETY: 5 Real Ways YouTube Can Fix Its Problems With the Music Industry

September 5th, 2017 by Amy Lee


Lyor Cohen recently wrote a piece defending YouTube and what it has done to benefit songwriters and artists, which included “five factors that explain the current situation.” The industry has responded forcefully — rightly so — and pointed out the many deficiencies in Mr. Cohen’s arguments and in YouTube’s actions. In an effort to help Mr. Cohen and his friends at YouTube and its parent company Google, we suggest five ways YouTube can actually be successful in working with the music creators it claims to help promote. If YouTube is serious about treating and paying creators fairly, these are actual steps they can take beyond a blog post.

First, YouTube must commit to “take down, stay down” — or keeping infringing videos down after a proper DMCA takedown notice. We know this can be done. In fact, YouTube should be commended for quickly, effectively and permanently blocking hate and pornographic videos. It is clear to songwriters and artists that keeping videos that contain infringing material down isn’t something they can’t do, it’s something they won’t do. It is time for YouTube to step out from behind the protections of the DMCA and work with the music industry to ensure that where copyright owners identify infringing content, that material is taken down permanently.  Show songwriters and artists that their rights — and the time taken to protect those rights — are a priority to YouTube.

Second, YouTube must provide greater transparency into and scrutiny of their “partners,” including multi-channel networks (MCNs) that operate unchecked on the YouTube platform. YouTube is aware that many of these partners do not have licenses to use the massive amounts of music contained within their videos, but it has chosen to remain willfully blind. And it continues to collect substantial revenue from these MCNs while artists and songwriters are paid nothing for the use of their music. Again, YouTube must demonstrate that it values songwriters and artist as business partners equal to the MCNs. Making public the list of MCNs and partners operating on the YouTube platform, and working with copyright owners to address those partners who use music unlicensed, is an important and doable first step.

Third, Lyor puts a large emphasis on transparency in the industry. Sadly, however, YouTube is anything but transparent when it comes to royalty payments it has made to songwriters and artists. Mr. Cohen himself provides an incredibly vague explanation as to why YouTube’s royalties seem too low, blaming it on international payments. Specifically — or, rather, unspecifically — he says, “YouTube is global and the numbers get diluted by lower contributions in developing markets.” Why not simply make public YouTube’s royalty payments in each country? This would go a long way toward the industry transparency he claims is so important. Instead, he implores us to trust that they are “working the ads hustle like crazy.” Mr. Cohen’s comments provide little consolation to the working songwriters who are hustling every day, and who need more than ambiguous promises.

Speaking of payments, our fourth suggestion is that YouTube look to its competitors and pay at least as much as they do to songwriters. Mr. Cohen compares his platform to Spotify, which arguably provides a reduced service since its music isn’t accompanied with video. But Spotify and other subscription services such as Apple Music pay a statutory minimum rate for interactive streaming, and YouTube does not. Paying this minimum rate — dictated by Section 115 of the Copyright Act and determined by the courts — would provide a floor for working writers who need a minimum wage from the world’s largest music service. Though music played on YouTube is not a traditional mechanical reproduction covered under Section 115, this would guarantee songwriters something reliable they could take to the bank — and is still woefully inadequate, considering the contribution songwriters make to YouTube’s services.

Finally, our fifth suggestion is stylistic: YouTube should change its tone when it comes to takedowns. For years, YouTube displayed a red sad face where a proper takedown of pirated material occurred. This gave millions, if not billions, of consumers the idea that when the law is enforced, it’s something to be upset about. This taught users — particularly millennials — to expect free content on the Internet. However, imagine the reality for songwriters and music creators — who poured their hearts and finances into creating something — to see a digital company that is using their work express disappointment when their rights are enforced. No one wants music to be taken down, but we do need a legitimate Internet marketplace, as opposed to the Wild West where writers are the casualties. Their work deserves to be valued, and it’s disappointing when it’s stolen, not the other way around.

As an association, we at NMPA have worked with YouTube to fix problems in the past. We know they can do better, and we appreciate Mr. Cohen’s love of music. But if he really wants to promote the creators of it, he should pay them what they deserve.

Full article here:  http://variety.com/2017/music/news/five-real-ways-youtube-can-fix-its-problems-with-the-music-industry-guest-post-1202539359/

 

 

 

David Israelite, Pharrell Williams, Martin Bandier, Steve Boom, Yoko Ono Kick-Off NMPA’s Centennial Meeting: Billboard

June 19th, 2017 by Amy Lee

6/14/2017 by

At today’s National Music Publishers’ Association Centennial Annual Meeting in New York, which always falls the day before the annual Songwriters Hall of Fame ceremony, NMPA CEO David Israelite said the organization’s number one goal is to get the music publishing out from under government regulation by getting rid of compulsory licensing. The only way for that to happen, he said, is if music publishers step up to the plate and help make licensing easier for services.

“We need an industry effort to get the government out of our business,” said Israelite, who later presented Pharrell Williams with the organization’s Centennial Songwriter Icon Award. The CEO said he envisioned a world where music publishers don’t have to deal with the Copyright Royalty Board, rate court judges and The Department of Justice’s consent decrees and can instead license music in a fair and open market which will help close the value gap between songwriters and recording artists.

As part of the agenda, Israelite suggested something unpopular with many of the gathered music publishers: challenging them to publicly make known their song catalogs and what percentage they own of each song.

Meanwhile, Sony/ATV Music Publishing chairman/CEO Martin Bandier called upon the industry to give songwriters their fair share and to acknowledge the importance of songwriters’ contributions.

“The fruits of our labor are not being equitably rewarded and we are not benefiting from the streaming revolution as meaningfully as we should,” Bandier said while also calling on the industry to correct another wrong.

“When I look today at the likes of Spotify, Apple Music and YouTube, I ask: where are the names of the songwriters,” said Bandier, who was presented with the organization’s Lifetime Service Award by Motown legend Smokey Robinson. “They are either not there or so hidden that you would have to be a special prosecutor, or perhaps The Washington Post – to find them. It is as if the songwriters do not exist and the only people who matter are the recording artists. However, without the songwriters coming up with the words and music in the first place, there would be nothing for the artist to record and no music to stream.”

Bandier did, however, acknowledge Spotify’s “Secret Genius” program, which features for example a songwriter playlist with Justin Tranter‘s most popular hits. Bandier called that an important move, but wants them and other services to go further.

Bandier called upon streaming services to show songwriter names as well as credit the artists who recorded the songs. “It’s a tiny step but a hugely symbolic one that will once again put the role of the songwriter front and center and remind everyone of the songwriter’s vital contribution to music and the industry,” he said, “And, ultimately, it will play a part in ensuring that these will become the best of times for everybody, including the songwriters and music publishers.”

Amazon VP of music Steve Boom, who gave a presentation on how its Echo device and Alexa AI will change music listening, responded to Bandier by saying that his company was working on giving songwriters credit.

Boom also reminded the NMPA that Amazon has been selling music since 1998 and pointed out that one size doesn’t fit all, which is why Amazon still sells physical music; and started its streaming service as part of Amazon Prime which was wrapped in and thus made the price not discernible.

He reminded attendees that 70% of listeners rely on free, i.e. radio and Pandora, to get their music, which is the demographic they are targeting with Amazon Prime. But now they are trying to lure them to pay with Amazon Unlimited, which came out with two price tiers for people who don’t want to pay $10 a month. With Alexa’s help they hope to convert users from Amazon Prime to the $3.99 a month service, which is only available on Echo. When the listener asks for a song that isn’t available in Prime, Alexa offers a free trial of the $3.99 service to hear the song. If Amazon can get them there, it’s not much farther to get users to pay $10 a month, he said.

Israelite in his speech also alluded to legislation in the coming weeks that may help the songwriters and publishers get closer to a free market solution that will “improve the songwriter’s and publisher’s place in the industry,” although he didn’t specify any details.

The NMPA head noted that he had just spent the last year making its case in the CRB rate trial while at the same time fighting with the Department of Labor. The last administration, he said, had the point of view that the entire history of the music publishing business didn’t exist and that the Copyright Office’s opinion does not matter so it ruled that publishers must do full-work licensing that music licensees favor, instead of the fractionalized licensing that the publishers want. BMI sued and won, but that is being appealed.

Israelite also said one of the main problems is that the ancient model of licensing is no longer relevant and no longer works. “It’s absolutely true that the labels are not supposed to release our songs until they are cleared and that the services are not supposed to put them up until they clear the songs too,” he said.

But music publishers, he said, can be “part of the solution by identifying the songs we own. The only way we can get get rid of the compulsory license, in existence since World War I and the consent decree, in existence since  World War II, is to make licensing easier for digital services.”

He compared the current situation to when the movie industry was afraid they would be regulated by government and came together to create the rating system that identified which age groups can see which movies. Israelite said “we need an industry effort to get the government out of our business.”

Israelite began his presentation by noting  the U.S. music publishing industry reached $2.65 billion, up 5.7% from $2.51 billion in the prior year. Within that he noted 54% was performance, synchronization was 21%, mechanical was 19% and other accounted for 6%.

Earlier in the night,  the NMPA Industry Legacy Award, was presented to ASCAP chairman Paul Williams, who was lauded by NMPA chairman Irwin Robinson for being “one of the most prominent in defending songwriters, both at home and abroad.”

Finally, in a special presentation, the NMPA honored an Icon Song, John Lennon’s “Imagine,” and played a clip of Lennon himself saying Yoko Ono should have gotten a songwriting credit for helping to write the lyrics. As such, Israelite gave Ono an award as a co-writer. She was accompanied on stage by Sean Lennon. The event closed with Patti Smith singing “Imagine,” with her daughter Jesse ParisSmith on piano.

To read the Billboard article, click here.

Yoko Ono Will Share Credit for John Lennon’s ‘Imagine’: NY Times

June 19th, 2017 by Amy Lee

By

“Imagine,” John Lennon’s seminal 1971 ballad for a utopian future without religion, borders or property, is getting a co-writer: Lennon’s widow and collaborator, Yoko Ono.

David Israelite, the chief executive of the National Music Publishers Association, announced at an industry event in New York on Wednesday, at which “Imagine” was honored with the association’s “Centennial Song” award, that Ms. Ono would be added as a writer.

“Tonight, it is my distinct honor to correct the record some 48 years later, and recognize Yoko Ono as a co-writer,” Mr. Israelite said at the ceremony, calling the credit, while belated, “well-deserved,” according to Billboard.

Ms. Ono, 84, attended the event, where the rapper and producer Pharrell Williams was also honored, for his songwriting.

Mr. Israelite told Variety that the process of adding the credit is ongoing, and is yet to be confirmed.

Extracts from a 1980 BBC interview in which Lennon said that Ms. Ono should share credit for the song were aired as part of the event. The song “should be credited as a Lennon-Ono song, because a lot of it, the lyric and the concept, came from Yoko,” Lennon said in the interview.

“Those days, I was a bit more selfish, a bit more macho, and I sort of omitted to mention her contribution,” he added, noting that the song makes direct reference to Ms. Ono’s 1964 book, “Grapefruit.”

First released in 1971, “Imagine” was an instant hit, but its popularity ballooned further still after Lennon was killed in Manhattan in 1980.

Ms. Ono posted the news of her inclusion as a co-writer on Twitter after Wednesday night’s event, and her son, Sean Lennon, wrote on his Facebook page that the announcement of the joint credit had come as a surprise.

Bloomberg: Songwriters Sing Blues Over Diminished Streaming Royalties

March 8th, 2017 by Amy Lee

The writers who craft songs for artists from Garth Brooks to Beyonce plan to tell a panel of judges this week that the increasing popularity of music-streaming services like Spotify will destroy their profession unless they get more royalties.

In a hearing scheduled to begin Wednesday, songwriters and the organizations representing them will try to persuade three federal judges on the Copyright Royalty Board in Washington to adopt a new standard that could earn songwriters a higher rate from streaming. Alphabet Inc., Amazon.com Inc., Apple Inc., Pandora Media Inc. and Spotify Ltd. are countering with their own proposals.

On-demand streaming has boosted overall industry sales two years in a row, surpassing iTunes and physical CDs as the largest source of revenue for the music industry. Songwriters say the shift has cut their pay and see the hearing as their best chance to propose a palatable status quo. Whatever rate the court picks will last five years.

Under the current model, streaming services give songwriters the greatest number of three possible outcomes — all of which amount to a share of revenue generated by the services. Songwriters want to add a per-stream rate to protect them from a number of changes in the industry that could limit their share of future sales in the industry’s fastest-growing sector.

“We should get compensated every time someone streams a song,” said David Israelite, chief executive officer of the National Music Publishers Association, a trade organization. “The structure is a complicated formula that’s about percentages of revenue, and we don’t think that works well for us, or that it’s fair to songwriters.”

Same Tune

It’s a familiar refrain. The music industry has been fighting internet companies in court and public for almost 20 years. While record labels’ sales have grown recently, they still have a long way to go to recover from listeners’ shift from CDs to pirated songs, singles from iTunes and free videos on YouTube.

All five streaming companies tout how much money they already pay back to musicians, and blame gatekeepers — record labels, music publishers and others — for keeping too much of the money. Apple has proposed a per-streaming royalty rate, but the songwriters say it’s too low.

Neither Spotify nor Pandora is profitable, and both companies argue that they already give away more than they can afford. Spotify, the largest of the music-streaming services, has been contemplating an initial public offering, but questions have lingered about its ability to make money eventually. Pandora’s on-demand service, a way to help restore growth for the online radio provider, will come out this month, the company said last week.

Alphabet’s Google unit declined to comment on the hearing in Washington. Spokesmen for the other companies didn’t respond to requests for comment.

Awarding royalties for songwriters is a byzantine process. While record labels can negotiate with Spotify on the open market, songwriters’ rates in the U.S. are subject to government regulation due to a law written in the era of the player piano. Some publishers, which represent songwriters and administer their royalties, already have their own deals with the streaming companies, but the hearing this week gives them a chance to set a new bar for the arrangements.

While recording artists have turned to touring to make up for lost CD sales, songwriters have no similar recourse. The number of composers working in Nashville has shrunk to less than 400 today from around 3,500 about 13 years ago, according to Lee Thomas Miller, one of the songwriters who may testify at the hearing.

“Spotify or Pandora will play a song millions and millions of times, and those are worth $10,” said Miller, who has written hits performed by country stars Garth Brooks, Tim McGraw and Brad Paisley. “The business of songwriting and publishing is over unless they change the way we get paid.”

Battle Averted

Songwriters and online services avoided a drawn-out legal fight five years ago — the last time the rates were reviewed. Then, most of the major streaming services were either small or nonexistent, and the framework for those deals was based on projections for a business that didn’t yet exist.

Paid streaming services have since ballooned. More than 100 million people around the world pay for a service of some kind, with Spotify and Apple Music attracting the lion’s share of customers.

On-demand streaming services make the majority of their money from paying subscribers, and some, such as Apple, don’t offer any free on-demand music. But the majority of music listening still occurs on free, advertising-supported services offered by YouTube and Spotify. Spotify generates a small fraction of its overall revenue from free customers, and songwriters would like a bigger portion of those proceeds, too.

Free Tunes

Amazon gives its streaming services for free to customers of its Prime delivery service, and publishers anticipate that other companies, such as mobile providers, will offer music as a free enticement for their packages. That could undercut their share of sales.

Publishers also expect that the growth in paying subscribers will slow even as consumption keeps growing.

“You have these giant companies using music to drive economics of other things about their business,” Israelite said. “Because of that, we’re likely to have a big war over how much they should pay songwriters to do things they do.”

(Updates with Pandora streaming service in eighth paragraph.)

To read the full article, click here.

Billboard: Facebook Developing Copyright ID System to Stem Music Rights Infringement

January 17th, 2017 by Amy Lee

As Facebook continues to grapple with its role in proliferating “fake news” amidst the heated U.S. election this year, it has another showdown looming on the horizon — this one with the music industry. In the wake of NMPA president/CEO David Israelite‘s op-ed in Billboard in October, in which he called out the social media giant for hosting videos with copyrighted music without securing licensing deals or paying creators, Facebook is working to develop a copyright identification system — similar to YouTube’s Content ID — that would find and remove videos containing copyrighted music, a source tells Billboard. The story was first reported by the Financial Times.

“In a recent snapshot search of 33 of today’s top songs, NMPA identified 887 videos using those songs with over 619 million views, which amounts to an average of nearly 700,000 views per video,” Israelite wrote in his op-ed, noting that many of the videos are fan-created cover songs — and that none have been licensed by the publishing industry. “In reality, the scope of the problem is likely much greater because, due to privacy settings on Facebook, it’s almost impossible to gauge the true scale.”

That scale is important for creators who, in a streaming world, generally get paid on a per-stream basis when their music is properly licensed to services like Spotify or Apple Music, and it adds up quickly. YouTube, despite coming under fire for almost the entire year due to what recording industry trade groups call the value gap and low royalty rates, announced earlier this month that it paid $1 billion to the music industry through advertising alone in 2016 (though one recording industry executive questioned the figure). And from Content ID’s launch in 2007 through July 2016, the company claims it has paid $2 billion to copyright owners through that system alone. With some 170 million users in the U.S. alone and 1.79 billion monthly users worldwide, Facebook outstrips even YouTube’s billion-plus users in scale.

One music industry source, confirming Facebook’s plans to develop a copyright ID system, says the company has a massive infringement problem in regards to music on the site. “They see the huge amount of traffic music content is responsible for on their platform and don’t want to be on the wrong end of an artist fight,” the person says. “They also see that there’s a potential opportunity to position themselves as friendly to content creators as opposed to YouTube, so they are working fast to get this right.”

Facebook has worked with the music industry in the past, test-driving a content partnership with Warner Music Group in Australia this past May, for instance, and has even ventured into this type of copyright system before with its Rights Manager tool launched this April, though that had a video focus. But as the company continues to push its video offerings and boost Facebook Live, the music industry is turning its attention toward the social media-turned-maybe-media company.

Talks between Facebook and the major labels are underway to license content moving forward, Billboard has learned, though they are still in the preliminary stages. In its report, the Financial Times referenced a source saying a deal would not be done before the spring.

A rep for Facebook did not return a request for comment as of press time, but it stands to reason that the company would like to avoid a showdown with the music industry, particularly as artist compensation continues to be a recurring theme from songwriters, producers, publishers and the rest.

“The reality for Facebook and YouTube is that more and more they are transitioning from tech platforms to media companies,” the source says. “And the more they look like media companies, the more they are going to have to act like them and respect creators and pay for content.”

For the full article on Billboard, click here.

New York Times: YouTube Reaches Settlement Over Songwriting Royalties

January 17th, 2017 by Amy Lee

YouTube, the latest target of the music industry’s battle over royalties and control, has taken steps this week to mend fences and show that it is a good partner. But the fight is far from over.

On Thursday, YouTube, which is by most estimates the most popular destination for music online, announced that it had reached a settlement with the National Music Publishers’ Association, a trade group, over the complex issue of unpaid songwriting royalties.

The settlement is estimated to be worth more than $40 million, according to two people with knowledge of the agreement who spoke on the condition of anonymity to discuss private terms. Neither YouTube nor the publishers’ association would comment on the amount.

In a persistent problem for the online music business, large numbers of songs have missing or incorrect data about their songwriters and which music publishers represent them, leaving what is widely estimated to be millions of dollars unpaid. The publishers’ association has made a series of deals to address the problem, most recently with Spotify.

The agreement with YouTube, which is owned by Google, will give participating publishers — the companies that traditionally manage songwriting rights, which are separate from those of recordings — access to a list of songs for which YouTube has missing or incomplete rights data. YouTube will then pay any accrued royalties from a fund it has set aside for this purpose.

“The revenue earned by the music industry on YouTube continues to grow significantly year over year, and we’re committed to making sure that publishers are paid for the usage of their works on our platform,” Tamara Hrivnak, YouTube’s head of music partnerships for the Americas, said in a statement.

Also this week, YouTube announced that over the last 12 months it had paid $1 billion in music-related royalties from advertising revenue, which it shares with people and companies that upload content to its platform. That announcement — which was somewhat more specific than YouTube’s past disclosures — may have been intended as an olive branch extended to the music industry.

Over the last year, a number of musicians and music industry groups have complained bitterly about what they call YouTube’s unfairly low payouts. The major record companies have been negotiating with YouTube for months to renew licensing contracts, and they are seeking higher rates.

Yet in a sign that all is still not well between YouTube and the music business, the announcement of $1 billion in royalties was quickly criticized as not being large enough.

“YouTube, the world’s largest on-demand music service, is not paying artists and producers anything like a fair rate for music,” the International Federation of the Phonographic Industry, a global music trade group, said in a statement.

BMI Rate-Court Judge Rules Against Dept. of Justice’s ‘100 Percent’ Licensing Decision | Billboard

September 19th, 2016 by Amy Lee

9/16/2016 by

In a surprise move, BMI’s rate court judge ruled on Friday that fractional licensing is allowed under the consent decree the performing-rights organization operates under, according to a statement from BMI.

According to Stanton’s ruling, “The consent decree neither bars fractional licensing nor requires full-work licensing,” which is the exact opposite of what the DOJ argued when it gave ASCAP and BMI one year to employ full-works licensing.

In making that ruling, Judge Louis Stanton ruled against the Dept. of Justice’s controversial decision on June 30 — which insisted that the consent decree mandated full-works licensing (also known as 100 percent licensing) and gave both ASCAP and BMI a year to adopt that type of licensing. The decision was roundly criticized by the publishing industry and embraced by licensees, including digital services and radio networks.

The difference between fractionalized licensing and full-works licensing is that in the former case a licensee must obtain a license from each copyright owner of a song — no matter how many authors it may have — in order for the user, say radio, to play that song. The music publishing industry says that fractionalized licensing is the way it has worked for decades.

In full-works licensing, a licensee or music user would need a license from only one of the songwriters — and licensees claim that’s they way they have been operating too for decades.

The argument came to a head when the DOJ was asked to review the consent decree to modify for the modern music environment. But instead of modifying it, the DOJ instead made the consent decree even more onerous to music publishers and songwriters.

In response, the two PROs, ASCAP and BMI said they were going to fight it, BMI through its rate court, which held its hearing today, while ASCAP would lobby Congress to seek a legislative correction, if the court case failed.

According to a BMI statement, federal Judge Louis Stanton issued an order rejecting the US Department of Justice’s recent interpretation of the BMI consent decree, and concluded that BMI is free to engage in the fractional licensing of musical works. This decision immediately followed oral arguments heard today from both parties.  Judge Stanton’s ruling is now the controlling interpretation of the BMI consent decree.”

“As we have said from the very beginning, we believed our consent decree allowed for the decades-long practice of fractional licensing and today we are gratified that Judge Stanton confirmed that belief,” BMI CEO and president Mike O’Neill said in a statement. “Our mission has always been to protect the interests of our songwriters, composers and publishers, and we feel we have done just that. Today’s decision is a victory for the entire music community.”

ASCAP CEO Beth Matthaws applauded the BMI rate court decision.”This is terrific news for all of us in the songwriting community as we continue to work on modernizing the consent decrees to reflect the real world,” she said in a statement.

National Music Publishers’ Assn. president & CEO David Israelite too lauded the decision. “Thanks to the courage of Mike O’Neill, BMI, and the entire songwriting and music publishing community, the DOJ’s disastrous views on 100% licensing have been rejected by a federal Judge,” Israelite said in a statement. “This is a huge win for songwriters and a huge win for the rule of copyright law.”

For the full article on Billboard, click here.