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NMPA’s letter to President-Elect Donald Trump

By | Published on Friday 18 November 2016

National Music Publishers Association

After the US Internet Association, repping web giants like Google and Amazon, got in quick earlier this week with an open letter to President-Elect Donald Trump making various demands, including some in relation to ongoing copyright debates, America’s National Music Publishers Association has got its quill out and penned its own missive to the incoming Commander In Chief.

Dear President-Elect Trump:

As the association representing America’s songwriters and music publishers, we congratulate you on becoming the 45th President of the United States. As you have said many times, Washington needs to change, and one of the changes we hope comes from your Presidency is fairness for one of America’s most important small businesses: songwriters.

Giant technology companies have had a stronghold in Washington under the Obama Administration. Google, which owns the largest music streaming company in the world – YouTube – enjoyed a well-documented, close relationship with the White House, in particular.

Relationships like these led to an unfair and often hostile stance towards the creative community whose work has been systematically devalued by the very technology companies who rely on its product.

Such companies recently wrote to you requesting support for the Internet industry and its “innovation”, however we implore you to keep in mind that innovation is the first casualty of a lack of incentive. Once the songwriters, producers and publishers behind the music cannot make a living, not only will they suffer, but so will all of the technology and entertainment industries they fuel. For context, copyright industries contribute almost $2 trillion and account for almost 14.5% of the U.S. economy.

Intellectual property has been the victim of increasing pressure by Internet and digital companies who want to make other people’s private property free. The ultimate victim will be the music itself, after all incentives to create have been removed. We can resist this trend by advocating for strong and fair copyright policies which are the bedrock of our great nation’s artistic tradition.

Like many small business owners in America, songwriters are under attack by overregulation and degradation by Washington bureaucracy. We are hopeful that your administration is a sign of change for them – and that under your leadership they will be able to profit from the work they produce in a fair and free-market way, as other property owners do.

Attached to this letter please find a short summary of priorities for the songwriting and copyright community. As always, we are ready to answer any questions and hope the door will finally be open to the unsung heroes of the music industry: the songwriters.

Sincerely,

David Israelite
President & CEO
National Music Publishers’ Association



Why Protecting Copyright Should be a Priority for the Trump Administration

Grounded in the Constitution
Our Nation’s foundational document recognizes the importance of intellectual property in Article 1, Section 8: “To promote the Progress of Science and useful Arts, by securing for limited times to Authors and Inventors the exclusive Right to their respective Writings and Discoveries.” Our founders understood that protecting an individual’s right to their intellectual property encourages creation and dissemination of creative works, which in turn benefits the public good.

Creates Good Jobs and Fuels our Innovative Economy
Copyright protection provides an incentive for individuals to turn their creativity into property that can be traded in the marketplace. This construct has proven to be a cornerstone of our nation’s economy. In 2013, the core-copyright industries accounted for nearly seven percent of the U.S. economy. In that same year, these industries employed 5.5 million workers and exceeded the U.S. average annual wage by 34 percent. The creative industries also produce global benefits. A 2014 World Intellectual Property Organization survey, for example, highlighted economic and rule of law benefits in those countries with greater GDP attributed to the copyright industries. Our nation’s ability to remain a competitive world leader in today’s global economy relies on strong copyright protection.

Drives Innovation in the Digital Marketplace
Copyright protection enables innovators to create, deliver and license high-quality content based on customer and marketplace demands. Content creators and owners are embracing new technologies to deliver content to consumers how and when they want it. Effective copyright protections help make possible these innovations and the enormous economic benefits that follow.



Promoting Fairness for American Music Creators

Remove the Government from the Creative Process
As the music industry moves into the digital age, so should the antiquated laws and regulations that affect it. For more than 100 years, songwriters have been denied the ability to negotiate the value of their intellectual property in a free market. In fact, today 75% of a songwriter’s income continues to be regulated by outdated laws and government regulations. The results from this rigged process have clearly benefitted large technology companies who use music, which is why they are spending millions to keep songwriters under these crippling regulations.

This overregulation dates back to 1909, when the sale of copies of compositions created on player piano rolls were put under a compulsory license by the government—meaning anyone could use them, for a government-set rate. Congress’ intention was to promote competition in the player piano market, but over time these rules were applied to records, CDs, and downloaded or on-demand streamed songs.

Additionally, the two largest performing rights organizations (PROs), which negotiate blanket licenses, collect royalties, and enforce rights on behalf of songwriters with entities that publicly perform music are governed by Department of Justice (DOJ) consent decrees from 1941. Under these consent decrees a federal court – not marketplace negotiations – decides what songwriters are paid. To make matters worse, the court can only consider limited marketplace evidence in these proceedings.

Sadly, the DOJ under the Obama Administration has attempted to make these consent decrees even more burdensome at the behest of large corporate interests who benefit financially from depressed songwriter royalties. We hope the Trump Administration will conduct a fair and meaningful review of these antiquated consent decrees, which have not been updated since the invention of the iPod. In conducting this review, we hope more deference will be given to the views of the music community, the Copyright Office and Members of Congress than has been afforded by the current DOJ.

Congress is also in the process of reviewing the Copyright Act and must decide whether a law from 1909 and consent decrees from 1941 should continue to compel songs to be licensed at below-market prices set by the government. Ideally, the free market should decide the value of a songwriter’s creation. However, if Congress concludes that songwriters’ property rights will continue to be regulated, the law should at the very least ensure a fair, market-based rate standard is used to compensate the copyright owner. To that end, the Trump Administration should work with Congress to enact bipartisan, bicameral legislation known as the “Songwriter Equity Act,” which would be a welcome first step to level the playing field when the government sets the value of musical works.

Provide Meaningful Tools to Combat Copyright Theft Online
Online copyright theft continues to grow globally. This threatens not only creative industries and the innovation economy they support, but also national priorities driven by copyright (economic growth, job creation, technology innovation, free speech). Protecting copyrighted works from piracy in effective ways is therefore in the national public interest.

The Digital Millennium Copyright Act (DMCA) was enacted in 1998 during the infancy of the Internet. Among other things the DMCA established a regime under which online service providers would receive “safe harbor” liability protection if they respond to notices of infringement from copyright owners. Unfortunately, today this notice and takedown procedure provides completely inadequate protection for copyright owners to address infringement of their works online. The courts have effectively expanded the safe harbors beyond what Congress intended, requiring copyright owners, including songwriters and publishers, to expend a massive amount of time and resources policing the Internet for unlicensed uses of their content. The result of these judicial interpretations has been rapid growth in Internet services that build business models around massive amounts of infringing content, while claiming to comply with the requirements of the law.

The DMCA has created a market distortion enabling service providers that in reality function as content distributors to use the DMCA to pay less than market value or nothing at all for music content and compete with legitimate, licensed services that actually engage in meaningful negotiations with content owners to license music content. This has hurt the growth of legitimate services that are forced to compete with unlicensed services that use the safe harbors as a shield. Unfair competition impedes the marketplace. Here, unfair competition comes in two forms: completely unlicensed services; and services that negotiate “in the shadow of the law” to obtain below market rates. This distortion in the market stifles investment and ultimately reduces innovation and diversity of services and business models.

Songwriters and music publishers send thousands of notices daily to these sites only to find the same infringing content back up on the site. This status quo disproportionately impacts small copyright owners who lack the resources to police all the potentially infringing uses of their work online. Technologies and processes exist today, and others can be readily adapted, to improve the efficacy of the notice-and-takedown process, at least with respect to sound recordings and the musical compositions embodied therein. Given the state of filtering and other technology available to service providers it is appropriate for Congress to consider shifting additional responsibility for addressing infringement toward copyright users in order for them to qualify for safe harbor protection.

Encourage Intermediaries to Cooperate in Preventing Infringement
Commercial Internet sites that profit from unlicensed music downloads, streams and lyrics remain a significant challenge for songwriters and music publishers. These illicit services also undermine the market for legitimate, licensed services and sometimes put consumers at risk of identity theft and malware. In response to this problem, some Internet intermediaries have begun to take voluntary actions to help ensure their services do not support these sites. For example, advertisers and pay processors have adopted best practices to avoid piracy sites and in some cases terminate services to them. The major Internet Service Providers are participating in the Copyright Alert System, designed to dissuade their customers from sharing infringing content via peer-to-peer sites as well as educate them on alternative ways to access content legally. Google has announced that it is now taking DMCA takedown notices into account in ranking their search results, though there are still major questions about the efficacy of how they have implemented it.

While the voluntary steps by these industry sectors are an encouraging first step, we believe that much more can be done. The Trump Administration should work with Congress to examine this issue and determine whether changes to the law are needed to facilitate more robust cooperation to combat this problem.

Advancing High-Standard Trade Agreements
The future growth of our creative industries depends on access to foreign markets. As you noted during your campaign, unfortunately far too many foreign governments do not protect and respect our nation’s intellectual property. If our trading partners want access to the U.S. market, our bilateral and multilateral agreements with those nations should require they adopt modern intellectual property regimes that promote the rule of law. Our government must also remain vigilant to ensure these obligations are consistently met by our trading partners.



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