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Beef Of The Week #421: Aging artists v the 74 million dollar man

By | Published on Friday 14 September 2018


While we’ve been getting all distracted with the big vote on Europe’s Copyright Directive with its controversial safe harbour reform, there’s been a mini drama unfolding Stateside in relation to its big copyright reform project. All of which led to activist artists this week ‘billboard stalking’ around Washington the man who – among other claims to fame – lists being Chair of SiriusXM, Pandora and Live Nation on his CV.

Those of you sitting in the Venn diagram intersection of ‘regular readers’ and ‘people who actually pay attention’ will remember that the big package of copyright reforms in the US goes by the name of the Music Modernization Act.

Whereas Europe’s Copyright Directive seeks to address particular copyright challenges that have occurred with the rise of digital, the MMA simply hopes to remove some of the more ridiculous elements of the American copyright system. Although, I suppose, ridiculous elements that have caused particular challenges with the rise of digital.

The MMA actually brings together various copyright reforms that were originally proposed in US Congress through separate bills. This includes a big fix to what lawyers and academics officially call the ‘American Mechanical Royalties Shitstorm’. That should help to ensure that songwriters get paid the mechanical royalties they are due whenever their songs are streamed. And also mean that streaming services don’t have to tackle counter-productive billion dollar lawsuits just because they couldn’t work out who needed paying.

But aside from the AMRS, the MMA will also fix another quirk of American copyright law, what lawyers and academics call the ‘Fucking Stupid Pre-1972 Thing’.

This will clarify that the online and satellite radio services that are obliged to pay royalties to labels and artists must pay those royalties on all recordings that are in copyright, and not just those that had the good fortune of being recorded after 1972. Because the obligation to pay those royalties comes from US-wide federal law, and pre-1972 recordings are protected by state-level copyright law, some services have argued royalties aren’t due on the golden oldies.

By seeking to address both the AMRS – which affects songwriters and music publishers – and the FSP1972T – which affects artists and record labels – the combined MMA was able to rally the wider music community together in a campaign to pressure Congress to push the reforms through. The AMRS proposals also benefit the on-demand streaming services, so the digital platforms signed up to join the party too.

Those crafting the MMA hoped that if they could show enough consensus in Washington, they’d get their proposals through in a super speedy fashion, despite all that’s going down in the American capital these days.

When the proposals went to the lower house of Congress, aka the House Of Representatives, they were approved in a super speedy fashion. In a super duper speedily speedy fashion, in fact. They then passed to the upper house, aka the Senate, where there has been a little more wrangling. Still, even there they have been approved by the relevant committee, and the consensus is that there is now enough support to get the whole thing voted through, if only a vote on the MMA would be put on the agenda.

However, there has been a last-minute hitch in the form of an intervention by satellite radio service SiriusXM. It is one of the radio businesses that has to pay royalties to artists and labels and will therefore be affected by the MMA proposals on the FSP1972T. It has raised various late-in-the-day issues with the proposed copyright reforms, while having another good moan about the fact that while online and satellite radio services have to pay royalties to artists and labels, AM/FM radio stations in America do not.

That’s another ridiculous element of the American copyright system that puts it out of kilter with the copyright systems pretty much everywhere else in the world. And it’s another thing the music industry has been lobbying hard to fix. However, the traditional radio lobby is particularly strong in Washington, and the music community’s lobbyists feared that if they made an AM/FM royalty part of the MMA, the entire package of changes would be scuppered. And the AMRS and FSP1972T really need fixing now.

Despite knowing all that, SiriusXM is pushing for some further amendments to the MMA. Additional changes which supporters of the legislation fear could cause the entire plan to fail, after artists, labels, songwriters, publishers, digital services and their representatives have worked so hard to get the whole project this far.

Aware that its late intervention on the MMA is contentious, SiriusXM has been trying to defend itself in US trade mag Billboard. The company’s EVP and general counsel, Patrick Donnelly, mused in a recent op-ed piece that “the music industry is a funny business”. The current “funny”, he said, was the fact that “SiriusXM has licensed from copyright owners every pre-1972 recording it uses, and the company is still accused of not paying artists for their works, and of even being ‘unfriendly’ to artists”.

He then argued that SiriusXM had “good reasons” for opposing the current version of the MMA. “Radio is radio”, he wrote. “The time has come for terrestrial radio to pay their fair share. The average American listens to AM/FM radio nearly fifteen hours per week and radio stations have never paid one cent for the use of those recordings”.

He then pretty much immediately conceded that that’s not going to happen, and instead talked through the elements of the MMA that change the way the American Copyright Royalty Board and the courts that oversee the song right collecting societies set the rates licensees must pay. These are among the elements SiriusXM would like to further amend, in part because – Donnelly argued – the current proposals provide AM/FM stations a further advantage over their online and satellite competitors.

Make of that what you will. But I can tell you that the MMA’s champions in the music industry are not impressed. “SiriusXM’s top lawyer says ‘music is a funny business’ but the company’s effort to kill music licensing reform is no joke”, responded Mitch Glazier, President of the Recording Industry Association Of America, in another Billboard piece.

Sirius, he said, “seeks to upend one of the most popular and broadly supported pieces of music legislation in decades – a bill that has to date 75 bi-partisan co-sponsors in the Senate, the backing of every creator organisation, and all the major music services – except, of course, for SiriusXM”.

Referencing that SiriusXM is keen for everyone to note that it is already paying royalties to both artists and labels on pre-1972 recordings, Glazier pointed out that that only happened after both artists and labels went legal.

“SiriusXM wants artists to acknowledge it ‘has already paid for all of the pre-1972 works it uses'”, Glazier said. “This claim is especially rich under the circumstances – probably the most carefully worded spin I have seen in years – and I live in Washington, DC”.

Picking holes in the various arguments presented by Donnelly, Glazier also wrote: “The company knows its proposed changes cannot be accepted, but that’s OK if its real goal is simply to kill reform – which probably explains why the arguments it is making are so illogical and thin”. Ouch.

Meanwhile, over on the socials, two of the people most associated with the MMA – National Music Publishers Association boss David Israelite and music lawyer Dina LaPolt – have been even more scathing of the satellite radio firm.

The former posted on Instagram that “the last obstacle to reforming our music laws is SiriusXM. They are making a desperate last ditch effort to kill MMA for the sole reason they don’t want to pay creators fairly. Don’t let them”. Meanwhile the latter tweeted this week: “Hey SiriusXM you greedy pieces of crap, your lies are pathetic. BACK OFF the #MusicModernizationAct and let the Senate pass it AS IS”.

All of which brings us to the promised billboard stalking. Not that Billboard. This billboard. The boss of SiriusXM parent company Liberty Media, Greg Maffei, was in Washington this week, seemingly in part lobbying on behalf of the satellite radio firm of which he is also Chair. Liberty Media has its fingers in lots of pies, of course, with stakes in Pandora (via Sirius) and Live Nation, hence Maffei is Chairman of those companies too.

With Maffei in town, campaign group the Content Creators Coalition decided to tour a billboard around Washington featuring the Liberty CEO’s face and that of an elderly musician. Based on a 2015 New York Times article that reckoned the Liberty Media exec was struggling by on an annual pay packet of $74 million, the billboard declares: “What SiriusXM boss Greg Maffei makes: $74,000,000. What he wants to pay elderly artists: $0”

The Coalition also stated: “The fact that Mr Maffei and SiriusXM continue to directly profit off the work of elderly artists without paying them fairly is appalling. And the fact that SiriusXM thinks storming the Hill with a Wall Street CEO and an army of lobbyists in a desperate, last-ditch attempt to kill the Music Modernization Act, shows the world just how clueless the company is. That is why artists today are responding to Mr Maffei saying: ‘You can’t be Sirius”.

So, if you’re feeling fatigued from all the campaigning and Google-bot-battling in Europe in order to get the Copyright Directive through to the next stage, have yourself a shot of strong coffee and get back into beefing mode. This time: Washington.