Monday, July 6, 2020

US Copyright Office: Congress should wait until EU's Art. 17 is implemented before reforming DMCA's safe harbour provisions

By Emmanuel Legrand

The US Copyright Office (USCO) has suggested that Congress should wait for the European ​Copyright Directive's content liabilities provisions for internet service providers (Article 17) to be fully implemented before considering updating the United States current take-down system and the safe harbour provisions contained in Section 512 of the Digital Millennium Copyright Act.

  The recommendation was made by Maria Strong (pictured, below), the Acting Register of Copyrights and Director of the USCO, in a letter to Senators Thom Tillis and Patrick Leahy from the Senate Judiciary Committee. Strong was responding to a letter co-signed by Tillis and Leahy dated May 29, 2020, in which they asked a series of questions regarding the USCO's recent report on 'Section 512 of Title 17'.

  One of the issues tackled by Strong in her letter is the need to address the notice-and-take-down process in order to achieve "a more equitable balance between deterring bad notices and requiring too much time and effort by a small rights holder to submit a take-down notice."

A burden on small rights holders

  "As the Office noted, the notice-and-take-down system currently imposes a greater burden on small rights holders: these stakeholders often do not have access to the technologies that larger OSPs make available to larger rights holders, such as filtering systems that can identify infringing content and alert the rights holder," wrote Strong.

  However, Strong remained cautious about the notion of stay-down, following a take-down, which is often a request from rights holders who consider that the take-down system does not work as infringing content reappears almost instantly once taken down. "As noted in the Report, there currently is no extant model for successfully mandating universal stay-down," wrote Strong. She then alluded to countries in the European Union that have taken different approaches to implement the requirements of Article 17 of the EU Digital Single Market Copyright Directive.

Evaluate success or failure

 ​  “Given the international nature of the internet, there is a risk associated with being the ‘first mover’ for adoption and implementation of such a requirement," she wrote. “Were the United States to adopt its own implementation method and requirements at the same time as, and without reference to, those adopted by the EU, it would risk placing requirements on OSPs [online service providers] that are either incompatible or otherwise in tension with the EU’s requirements."

  She added: "Incompatible obligations could pose a significant adverse economic impact for US-based OSPs attempting to serve both the domestic and the foreign market. It may, therefore, be prudent to wait and see whether the EU ultimately coalesces around one or two models, and then evaluate the relative success or failure of those models against the current notice-and-take-down system in the United States.​"

Changes to improve the system

  Elsewhere in the letter, Strong identified a series of changes that could improve the system:

  1 - Congress should clarify the distinction between “actual knowledge” and “red flag knowledge.”  Currently, wrote Strong, Section 512 provides that, in order to qualify for a safe harbor under section 512(c) or (d), an OSP must act expeditiously to remove or disable access to infringing material when it has either actual knowledge that the material or activity on its service is infringing, or when the OSP becomes “aware of facts or circumstances from which infringing activity is apparent,” which is commonly referred to as red flag knowledge. Strong notes that "the knowledge requirements could benefit from additional statutory language that could incorporate a reasonableness standard to explicitly take into account differences among OSPs in terms of the sophistication of their operations and their technological capability to respond to red flag knowledge."

  2 - Congress should clarify its intent regarding the content requirements for a valid take-down notice, specifically the provisions concerning the submission of a representative list of infringed works and adequate identification of the location of infringing material, as, according to the USCO, the "current statutory language ambiguous and potentially contradictory."

  3 - The current functioning of section 512 "may be improved" by providing the Office with increased regulatory authority to set standards related to the manner in which compliant notifications may be submitted to designated DMCA agents. Strong suggested that Congress could "grant the Office additional authority to specify criteria related to the location, prominence, and content of the required public identification and contact information of an OSP’s designated DMCA agent on its website, to ensure that the public can easily locate this information."

Offer broader solutions

  4 - The USCO recommended that Congress should consider "not only reforms to section 512(f), but also broader solutions outside of section 512 to address abuse practices generally, including the filing of abusive complaints in court or the sending of abusive cease and desist letters." Strong noted that the issue of abusive allegations of copyright infringement "is serious, and congressional attention to the broader question of how to best discourage such uses of the copyright system could provide more effective mechanisms to address the problem."

  5 - The Office noted "concerns about the ten to fourteen day window in which content remains down following receipt of a counter-notice," but the time frame "is both too long for legitimate speech to be blocked and too short for a rights holder to realistically prepare to file a federal lawsuit to prevent the return of infringing materials." To address this issue, Congress "may wish to consider a more flexible approach that allows users to seek a faster evaluation of their counter-notice or rights holders to seek an extension of the deadline for restoring the content."

  The 19-page letter is available here in full.

Memo from European neighbouring rights societies to SoundExchange: If the USA joins the Rome Convention money will flow

By Emmanuel Legrand

European neighbouring rights societies were pondering their response to SoundExchange's latest campaign asking for “national treatment” for US performers and labels in the collections of neighbouring rights overseas, but it is quite likely that the position most societies will adopt will be: Join the Rome Convention, adopt performance rights for sound recordings played by terrestrial radio (equitable remuneration), and money will flow back to US rights holders.

  At the moment, according to SoundExchange, US artistes and labels are victims of “discrimination” since they cannot received the proceeds of equitable remuneration in countries like the UK, France, Italy or Germany. In a campaign initiated two weeks ago, SoundExchange and a coalition of music-related organisations representing labels and performers have been asking the US government to make it an agenda item in the trade negotiations with other countries or regions.

  Earlier this year, SoundExchange referred several countries, including Japan, the UK, France and others to the US Trade Representative to have them included in the Special 301 Report, identifying the countries with which the USA has IP issues. Around that time, SoundExchange sent letters to neighbouring rights societies named in the USTR list, pointing out that the system in place in these countries was penalising American creators by allowing their works to be used without compensation.

Apply reciprocity

  European societies contacted by this writer have declined to comment on SoundExchange's latest campaign. It is understood that several European societies have been discussing about a common position without so far issuing any joint statement.

  Speaking off the record in order to speak candidly, several European executives said that the treatment reserved to US rights holders was not related to discriminatory practices but boiled down to the fact that the United States are still not signatory to the Rome convention, and although they are part to WIPO's WPPT treaty, they only grant the benefits of equitable remuneration to performers and producers of phonograms for the use of music on non-interactive digital services. As a result, terrestrial radio in the US still does not pay performance rights on recordings.

  Executives noted that US performers can benefit in full from equitable remuneration in Europe if their recordings have been fixed in a country signatory to the Rome Convention. What defines the current system, said an executive, is the concept of reciprocity. Since the US do not have performance rights for the use of recordings on terrestrial radio, there is no reason these rights should apply to US rights holders outside of the US.

Fighting the wrong battle

  "American artists are not denied rights because of their nationality,” said one executive from a continental European society, “but this is unfortunately the case for all artists, regardless of their nationality, who have recorded with producer members from countries that have not ratified the Rome Convention, and that includes the United States.”

  The executive continued: “Furthermore, European artists are denied their rights to equitable remuneration in the United States on analogue radio broadcasts while they enjoy these rights in their countries of origin, which constitutes discrimination which is only due to the refusal of the United States to ratify without reservation the international conventions which recognise the neighboring rights of performers.”

  Another executive from another European country said it was not the first time Sound Exchange publicly challenged European collective management organisations (CMO). “Just like the first time, we are not amused this time either,” said the executive, claiming that Sound Exchange and unions representing artists and musicians such the American Federation of Musicians (AFM) and SAG-AFTRA, are “fighting the wrong battle.”

A two-sided story

  “Their fight should not be with the European societies, but with their own government,” the executive added. Regarding equitable remuneration for broadcasting and public performance, the executive argued that “the legal basis is the Rome Convention, to which the US is still not a party. The problem is as simple as that. You cannot ask for national treatment within the context of a treaty if your country has not signed the treaty.”

  The executive said that the easiest way to give US labels and performers access to the European equitable remuneration for broadcasting and public performance "is to convince the US government to sign the Rome Convention, which is nothing more than an old but still very current free trade agreement. This would then allow the European CMO’s to extend their licenses to US repertoire and – with the help of the US performers – negotiate new and better tariffs for the use of music.”

  The executive concluded: “It’s a two-sided story. We’ll get there in the end.”

Maria Schneider files class action suit against YouTube for copyright infringement

By Emmanuel Legrand

US composer and performer Maria Schneider has filed a class-action lawsuit against YouTube and parent companies Google and Alphabet in the US District Court in the Northern District of California, San Jose Division, seeking damages and injunctive relief for copyright infringement under the Copyright Act.

  At the heart of the lawsuit is how independent rights holders that do not have access to YouTube's Content ID system can monitor and police infringing content. YouTube, according to the lawsuit is "replete with videos infringing on the rights of copyright holders" and has "facilitated and induced this hotbed of copyright infringement through its development and implementation of a copyright enforcement system that protects only the most powerful copyright owners such as major studios and record labels."

  Plaintiffs and the Class are described as "the ordinary creators of copyrighted works" and "are denied any meaningful opportunity to prevent YouTube’s public display of works that infringe their copyrights—no matter how many times their works have previously been pirated on the platform. They are thus left behind by YouTube’s copyright enforcement system and instead are provided no meaningful ability to police the extensive infringement of their copyrighted work."

Deliberate limitations

  It added: "These limitations are deliberate and designed to maximise YouTube’s (and its parents Google’s and Alphabet’s) focused but reckless drive for user volume and advertising revenue."

  Plaintiffs argued that "Defendants permit and facilitate this infringement because it furthers their growth and revenue strategies and because they have determined that Plaintiffs and the Class —  unlike YouTube’s preferred Content ID partners — lack the resources and leverage necessary to combat copyright infringement on the scale at which it is perpetuated on YouTube."

  Plaintiffs filed for five actions the Defendants are allegedly responsible for: direct copyright infringement, inducement of copyright infringement, contributory copyright infringement, vicarious copyright infringement and removal of copyright management information and distribution of altered or missing copyright management information.

Offer Content ID to all persons

  Plaintiffs are seeking that the action "may be maintained as a class action." They also asking for a jury trial and for the court to grant Plaintiffs and the Class injunctive and other equitable relief enjoining Defendants from a) directly or indirectly reproducing, publicly performing, publicly displaying, or distributing the copyrighted works to which Plaintiffs and the Class have exclusive rights, b) causing, contributing to, inducing, enabling, facilitating, or participating in the infringement of any of the works cited in the lawsuit, and c) to "affirmatively adopt, implement, and offer to all persons the technological measures available now, including Content ID, and those that shall become available in the future to identify and protect copyrighted content uploaded without consent and prevent it from being posted or otherwise made available through the facilities owned, operated, or controlled by Defendants."

  Plaintiffs are also seeking damages and Defendants’ profits derived from the infringing acts, and/or statutory damages.

Germany's indie labels' body VUT becomes GVL's fourth shareholder

By Emmanuel Legrand

VUT, the German Association of Independent Music Entrepreneurs, has become the fourth shareholder of GVL, the Berlin-based neighbouring rights society for Germany, alongside BVMI (the Federal Association of the Music Industry), DOV (German Orchestra Association) and BFFS (the Federal Association of Actors).

  VUT will represent on GVL's board the interests of independent music entrepreneurs. VUT counts independent labels as well as about 1,200 performers who control their master recordings. VUT Managing Director Jörg Heidemann will represent VUT in GVL's shareholder committees.

  VUT's share come from a transfer from some of BVMI's shares. DOV and BFFS shares remain unchanged. BVMI and VUT will now jointly supervise the sound recording side within GVL, noted Florian Drücke, Chairman & CEO of the BVMI.

Distributive justice

  "We are excited about our new role as co-shareholders of the GVL and are pleased that the independent music entrepreneurs now have another opportunity to participate in the GVL committees," said Heidemann, who added that the indie labels' organisation will bring international expertise through its work with European indie labels' trade body IMPALA, and plans to contribute "to the issues of transparency and distributive justice.”

  “We are pleased to have gained the VUT as another shareholder by our side, which is going to support members’ interests and give them a strong voice when it comes to managing their rights," said GVL Managing Directors Guido Evers and Tilo Gerlach.

  The inclusion of VUT was made possible by changes in the statutes and the organisational structure of GVL under the new Collecting Societies Act (VGG). The organisation's Assembly of Shareholders and Delegates is made up of its shareholders – BVMI, BFFS, DOV and now VUT – as well as the 22 delegates that have been elected by the Assembly of Rights Holders. The Assembly of Shareholders elects a supervisory committee where one representative per rights holder category (artists, producers) oversees the work of the Managing Directors.

  GVL represents the rights to 160,000 performers, producers of sound recordings and audiovisual recordings, music and music video clip producers as well as event organisers. It collects performance rights from the use of sound recordings in public and in the media as well as the proceeds from the private copying levy. In 2019, GVL posted total revenues of €215.5 million against €229.8m in 2018, down 6.3% year-on-year.

HIFI deploys its Royalties Dashboard aggregating all financial data sources

By Emmanuel Legrand

HIFI, a financial rights organisation for the music industry, has opened up for applications to join its membership community in order to have access to tools such as its complimentary Royalties Dashboard, a platform that aggregates financial data from labels, distribution services, PROs, music publishers and others. 

  HIFI said its Royalties Dashboard "provides music creators with a powerful, consolidated view of their current and future earnings and can advise them on steps to accelerate their careers."
  "Our Royalties Dashboard is the first tangible expression of HIFI's mission," said Damian Manning, Founder and CEO of HIFI. "It allows rights holders to see what they're earning across all of their royalty accounts, helping them make better business decisions. HIFI regularly hosts workshops and events to gather feedback and engage our community. A unified dashboard was a frequent request. And it will serve as a springboard for a suite of products that we're building for our members."

Provide transparency

  Max Gredinger, Artist Manager at Foundations Music, said HIFI offered "much needed transparency and access to royalties data across a multitude of revenue streams, and their financial services are thoughtfully designed to help effectively manage an artist's career."

  HIFI is also deploying Cash Flow among its charter members. The service, once fully implemented,  will allow artists to be paid twice a month like a salary, based on their revenue streams. Manning said the service was a frequent request from artists in surveys and workshops and Cash Flow will help creators getting access to credit and other market options generally unavailable to non-traditional earners.

  "The security of a consistent paycheck is another top priority for our members," said Manning. "HIFI can collect their royalties and guarantee a predictable income. As an independent, we collaborate with our artists' music services to facilitate Cash Flow. It's our independence and innovative technologies that make products like the dashboard and Cash Flow possible. There's so much we can do for HIFI members and we're just getting started."

Input from Matt Pincus

  HIFI has received the backing of several investors, including Matt Pincus, former co-founder and CEO of SONGS Music Publishing, which he sold in 2017 to Kobalt, via his new investment vehicle MUSIC, a joint venture with LionTree. Other investors include venture capital firms Lerer Hippeau and Flybridge Capital.

  Manning said HIFI was founded in New York by industry veterans and technologists to build tools taking into account the unique business and financial needs of music professionals that weren't being met by the market. HIFI has also recruited advisors and experts such as Platoon's Denzyl Feigelson, Splice's Steve Martocci, and Will Page, former Chief Economist at both Spotify and PRS for Music.

  "While the music industry has evolved dramatically over the past two decades, the financial solutions available to artists and their teams are historical relics by comparison," said Manning. "We represent a new kind of artist organisation, one that is focused on protecting the financial rights of its members. And rather than compete with other music organisations, we're building innovative products and services that work in concert with them to financially empower the creator class."

China-based Outdustry sets up publishing unit and signs Reservoir to sub-pub deal

By Emmanuel Legrand

Outdustry, the Beijing-based company providing music industry services in China, has set up Outdustry Songs, an independent music unit specialising in the Chinese market.

  Outdustry’s Head of International, Alex Taggart, will also be overseeing Outdustry Songs, reporting to Founder/MD Ed Peto. The company has its own China-based A&R team, led by China General Manager and Head of A&R Marcus Rowland. Outdustry Songs already has a catalogue of local repertoire performed by household names such as Chris Lee, Bibi Zhou, Jike Junyi, and TF Boys.

  “With the addition of Outdustry Songs to our existing marketing and A&R services business, we are filling out our offering to our global network of writers, producers, artists and rights owners, enabling us to collect royalties and monitor copyrights on their behalf across this dynamic emerging landscape,” said Taggart. "China is a huge opportunity for songwriters and publishers – from the fast-growing premium tiers of the biggest streaming apps in the world, to the national obsession with karaoke and the nascent sync market, as well as next-generation forms of music consumption and monetisation such as live-streaming and virtual-gifting.”

Untapped opportunity

  In addition, Outdustry Songs has secured a new partnership with New York-based independent music company Reservoir to become the exclusive sub-publisher in China for Reservoir’s catalogue of over 126,000 works.

   “China’s publishing sector represents the greatest untapped opportunity in the global music market,” said Taggart. “There could be no better launch partner than Reservoir, one of the most forward thinking companies in the global publishing business, with an absolutely stellar catalogue.”

  Added Reservoir’s EVP International & Emerging Markets, Spek: "Outdustry’s brilliant team has been pushing boundaries in the Chinese music market for over a decade. I’ve gotten to know Ed and his team over the last several years and I am confident they will be leaders in China’s vibrant and emerging publishing sector. Reservoir is always keen to innovate in new markets, and we’re excited to be the first music publisher to get on board with Outdustry Songs, plug into their considerable network in China, and pave the way for our creators in this space”

  Outdustry Songs claims to have "a unique set of non-exclusive direct licenses" with all major digital service providers in China: Kugou, QQ Music, Kuwo (Tencent Music Entertainment), Netease Cloud Music (Netease), and Xiami (Alibaba).

LANDR Pro Network plans to connect pros and manage all facets of their business

By Emmanuel Legrand

Music services platform LANDR has launched LANDR Pro Network, an end-to-end digital marketplace enabling professionals to market and manage every facet of their businesses remotely.

  Creators using the Pro Network can find and hire professionals (including engineers, producers, session musicians, songwriters/composers, designers, etc.) and collaborate in-platform while keep their content secure and private, and access creation and collaboration services (such as mixing and mastering, session musicians) and marketing tools like cover art design and social media promotion, among other services.

  LANDR Pro Network is free for professionals to use with their existing customers. "Having been in the industry for over 30 years, I believe that this marketplace is truly the future of music and will give more musicians more opportunities to create and distribute their music," said mastering engineer Howie Weinberg.

Boost to productivity

  "With LANDR Pro Network, we are not only helping professionals earn a better living and keep more of their earnings but also providing more equitable access to established, respected talent while bringing a huge boost of productivity at no extra cost," said Pascal Pilon, founder and CEO of Montréal-based LANDR. 

  LANDR launched in 2014 and claims to provide services to over 3.2 million independent artists and labels.

Artlist secures $48m from investors led by KKR

By Emmanuel Legrand

Artlist has secured a $48 million financial round led by investment firm KKR, via its Next Generation Technology Growth Fund II, alongside existing Artlist investor, Elephant Partners. The company said it would use the funding to “expand into new adjacent categories both organically and via acquisitions."

  Israel-based Artlist was co-founded by filmmaker Ira Belsky, who is co-CEO of the company, with Itzik Elbaz and Eyal Raz. It provides a royalty-free music and sound effects licensing content platform to creators on YouTube and other UGC platforms. Users pay a subscription fee between $149 and $599 per year, depending on usage. Artlist also provides, via Artgrid, a large catalogue of stock footage. It claims to have licensed more than 20 million digital assets in the past four years.

  “What impresses us most about Artlist is the management team’s dedication to helping creators focus on what they do best and removing friction from the process of discovering and accessing content,” said Patrick Devine, a member of KKR’s Next Generation Technology Growth investment team.

  He added: “The growth of digital content creation – and the evolving way in which it is consumed – has generated a tremendous amount of opportunities for creators, but the process of licensing digital assets remains a significant challenge for small and large creators alike."

Monday, June 29, 2020

US coalition led by SoundExchange asks for 'national treatment' for American performers and owners of sound recordings

By Emmanuel Legrand

A coalition of US organisations representing labels and performers, led by Washington, DC-based neighbouring rights society SoundExchange, has launched the "Fair Trade of Music" campaign, asking for "national treatment" and "fair and equal treatment of music creators when their music is played in markets around the world."

  "Many countries currently discriminate against some non-native music creators by denying them royalties for the use of their work, despite royalties being otherwise paid to creators who are nationals of those countries for the exact same use," wrote the coalition in a statement.

  As part of the campaign, the coalition sent a joint letter to US Trade Representative Robert E. Lighthizer, urging him "to make full national treatment for sound recordings a priority in future trade agreements, particularly in the ongoing US-UK negotiations." In this letter, the music industry groups pledged to work with Ambassador Lighthizer "to achieve full national treatment for American music creators in all future trade agreements."

Losing $330m in royalties

  "Without national treatment provisions to ensure fair treatment, US music creators are losing millions of dollars in royalties," wrote the coalition. SoundExchange estimates that US music creators lose more than $330 million in royalties each year "without universal national treatment protection."

  This situation is rooted in the fact that many countries around the world, which have neighbouring rights provisions in their copyright law, i.e. equitable remuneration for the use of recordings by media and in public spaces, do not pay royalties to American rights holders (performers and record labels) on the basis that such rights are not recognised in the USA, as terrestrial radio stations to not remunerate for the use of recordings.

  In addition, since the US has not ratified the World Intellectual Property Organisation's Rome Convention for the Protection of Performers, Producers of Phonograms and Broadcasting Organisations of 1961, many neighbouring rights societies are using the situation to decline royalties payments to US performers and labels for the use of recordings in their respective countries.

Call for equality

  The US system only recognises performance rights for recordings when music is played on non-interactive platforms such as iHeartRadio, Pandora or satellite-delivered service SiriusXM. These royalties are collected by SoundExchange and distributed to rights holders, including international rights owners.

  A source at SoundExchange acknowledged that the US do not have the full range of neighbouring rights, but noted that the US has a radio right which is digital and "generates much more money than terrestrial radio does in European countries."

  The source argued that the lack of rights' payment from terrestrial radio penalises first and foremost US performers and labels, who are as eager as anyone to see such rights exist in the US. "Nobody's getting these rights and SoundExchange has been arguing for the recognition of those rights," said the source. "These are two different issues. Europeans are not denied access to the rights collected in the US, but access to equitable remuneration in UK and other countries is denied to US artists. It is more about equality rather than the scope of rights."

End discrimination

  In February, SoundExchange filed comments with the US Trade Representative (USTR) asking for action to be taken against countries such as the UK, France, Japan, Germany, that refuse to give American recording artists and labels full national treatment. In March, Canada's Government implemented the US-Mexico-Canada Agreement, which granted national treatment protection to US music creators in Canada. As a result, US performers and labels will from now on be able to collect neighbouring rights monies from Canada.

   "Equal treatment is fundamental to international law, and this principle should extend to all music creators, no matter where they are from, who deserve to be paid fairly for their work," said SoundExchange President and CEO Michael Huppe. "Our goal is to end discrimination in the global trade of music. That should be a priority for our entire industry, including recording artists and labels on both sides of the Atlantic and around the world. The ongoing negotiations between the US and UK present an opportunity to make significant progress toward that goal."

  The coalition includes the American Association of Independent Music (A2IM), American Federation of Musicians, Future of Music Coalition, Gospel Music Association, Music Artists Coalition, Music Managers Forum-US, Recording Academy, musician's union SAG-AFTRA, and artists' advocacy group musicFIRST.

 The Fair Trade of Music website can be accessed here:

EU's Thierry Breton confirms ambitious regulatory agenda

By Emmanuel Legrand

Thierry Breton, the European Commissioner for internal market, has disclosed that he expects that the main guidelines on the new Directive on audiovisual media services, that will define the calculation methods for European works on digital streaming platforms, to be adopted in July by the Commission. Breton made the announcement in his keynote speech for the opening of the Cannes Film Festival's digital film market.

  Breton added that work on the guidelines is ongoing regarding the implementation of Article 17 of the Copyright Directive on the liability of platforms regarding infringing content, in particular with regards to cooperation between content sharing platforms and rights holders. "We plan to adopt these guidelines in the fall," said Breton.

  The Commissioner also said that he expects that by the end of the year the Digital Service Act will be presented "with a view to increasing the responsibility of platforms in all economic activities." He invited all stakeholders to participate in the current public consultation on this topic.

Need for ambitious investments

  Reflecting on these issues, Breton noted that "these regulatory measures are necessary to ensure a level playing field that is strengthened between all the players," but he added that legislation "will not be enough to preserve our cultural and linguistic diversity; our cultural sovereignty. There is a need for ambitious investments in digital technologies and skills."

  He concluded: "Admittedly, this requires significant collaboration and dialogue between the various links in the value chain. These elements should allow the emergence of a common vision capable of carrying ambitious projects on a European and global scale. You can count on me to carry out this task with all of you. The upcoming media action plan will be a key part of this shared vision."

House music artists Mr Fingers and Robert Owens sue Chicago label Trax Records for unpaid royalties

By Emmanuel Legrand

Electronic music artists Larry Heard (a.k.a. Mr Fingers) and Robert Owens, supported by TaP Music Publishing, have filed a lawsuit in the the United States District court for the Northern District of Illinois against Chicago-based indie dance music label Trax Records, the self-proclaimed "original home of the house", and the label's President, Rachael Cain, for alleged unpaid royalties. Heard and Owens released various musical compositions and sound recordings in the 1980s through Trax Records and claim that they have been underpaid.

  According to the lawsuit, Trax Records has been “building its catalogue by taking advantage of unsophisticated but creative house-music artists and songwriters by having them sign away their copyrights to their musical works for paltry amounts of money up front and promises of continued royalties throughout the life of the copyright."

  Trax Records was co-founded in 1983 by Larry Sherman, who died in April this year, aged 70. According to the suit, Cain was one of the first artists signed by Trax Records and performed under the moniker of “Screamin’ Rachael.” She eventually married Sherman and became his business partner, and she now President of the company.

Absence of legal counsel

  Around 1985-1987, Heard said he signed four documents with “Precision/Trax Records” which, according to the lawsuit, was "at the time, was not a formal legal entity, but rather a trademark utilized by Sherman." Heard did not have legal counsel when he signed these documents, one of which assigned or transferred to Precision/Trax 100% “of all publishing rights and all right, title and interest in and to the copyrights" then possessed by Heard in the musical compositions 'Can You Feel It', 'Washing Machine', and 'Beyond the Clouds'.

  On several similar occasions, Heard signed documents assigning his copyright to Trax. "At best, the Precision/Trax Documents were ambiguous. At worst, they constituted unconscionable contracts of adhesion which would result in decades of revenue streams flowing only to Trax/Precision (or other entities formed and operated by Sherman and Cain), with Heard deriving virtually no economic benefit from their exploitation by Defendants," reads the lawsuit.

   Because of Defendants’ "deceptive acts or practices," Plaintiffs are asking for actual damages "in an amount to be determined at trial but believed to be greater than $1,000,000." In addition, Plaintiffs are asking for attorney’s fees and costs, and interest on its damages at the legal rate.

Seeking justice and fairness

  Billboard quoted Trax and Cain's attorney Rick Darke of Duane Morris saying that Cain had been fighting for 15 years to get artists like Heard and Owen their royalties. Apparently, a Canadian investor, Casablanca Trax Inc., obtained the rights and licenses to music from artists like Heard, and later transferred the rights to another entity. These rights have yet to be paid.

  "Rachael Cain has been fighting for a long time to get these artists paid," Darke told Billboard. "She just hasn't received the monies from the parties responsible in order to pay them."  Darke added that, since 2002, Trax Records "has had no control over the Trax classic catalogue which we intend to rectify. I would like them to know I have not been in control of the classics and have been fighting to get them paid."

   Reflecting on the legal procedure, Heard said: “After doing several releases independently, it was so disappointing that my earliest ventures into the music business was with a label in the community that turned out to be dishonest, like with many other artists that we hear about all too often. We are simply seeking justice and fairness. Maybe, our efforts will shed light on the many predatory practices that have been in place for a long time in this industry.” 

Disregard for artists

  Owens added: “Trax’s treatment of those artists on its label is notorious to those in the electronic world. Many of my friends and fellow artists have been similarly treated. Hopefully this lawsuit will end Trax’s reign of non-payment. I’m grateful to TaP for their support in bringing this long overdue claim.”

  Ben Mawson, co-founder of TaP Music, said he and co-founder Ed Millett "are delighted to be able to support their claim against Trax Records who have behaved abominably over the years to many artists signed to them. We would ask any such affected artists to reach out to us and we will endeavour to support them however we can. Hopefully those in control at Trax now decide to do the right thing, after many years of shocking disregard for their artists."

Saturday, June 27, 2020

rightsHUB integrates data delivery feeds with Gracenote, DJ Monitor, Soundmouse, BMAT, Yacast and Jaxsta

By Emmanuel Legrand

Music rights data and asset management platform rightsHUB has integrated data delivery feeds with six leading music recognition technology (MRT) companies: Gracenote, DJ Monitor, Soundmouse, BMAT, Yacast and Jaxsta.

  rightsHUB said the integration with Nielsen-owned entertainment metadata specialist Gracenote, dance venues' tacking system DJ Monitor, music tracking company BMAT, cue sheets data supplier Soundmouse and French radio and online music tracking company Yacast into the first stages of the metadata supply chain will allow the platform to deliver "a key part of the toolkit to tackle issues around mismatched metadata and royalty payments."

  rightsHUB added that its new ability to easily register songs with MRTs prior to release "will mean that rights holders are supplying accurate and rich metadata to their partners early on; thus assisting PROs and CMOs in reporting."

Better identification of data

  In addition, the integration of Jaxsta, which operates the world’s largest database of official music credits, will help ensure that rightsHUB user's repertoire will be properly accredited.

  “It’s vital that rights holders take responsibility for registering their rights with MRT companies in the same way as they do with their distributors, CMOs and PROs," said rightsHUB CEO Lee Morrison. "With the correct data, revenue can flow to the rightsholder as it should. We have to give the MRT companies the data as early as possible into the promotional cycle so that performance can be identified."

  Added Morrison: “By offering this service for free to clients we hope rights holders will earn more revenue in the long term. In the past, this has not been possible for rights holders directly, due to them not having the technical capability. With rightsHUB, data can be delivered to all B2B partners at the touch of a button, reducing the need for multiple manual data delivery points”.

Friday, June 26, 2020

Blockchain-centric music and entertainment platform Bitfury Surround makes inroads in North America

By Emmanuel Legrand

Fabian Alsultany

Bitfury Surround, the Berlin-based blockchain-centered music and entertainment company, is building a business in North America, with the hiring of music and tech executive Fabian Alsultany (pictured) as Director of Business Development North America. Based in Los Angeles, his task is to grow the company's presence in the region. Alsultany was most recently Director of Business Development for the blockchain platform, RChain Cooperative, where he focused on the development of music technologies related to the future of streaming, micropayments, and digital identity.

  Alsultany will work with Surround’s Berlin-based team "to lay the groundwork for a new approach to music rights management and creativity in the US and Canada." Stefan Schulz, CEO and co-founder of Surround said Alsultany's "expertise in music and blockchain will prove invaluable as we roll out what we believe will be a transformative technology for music creators and stakeholders.”

  Bitfury Surround, founded in January 2019, is the music and entertainment unit of Amsterdam-based Bitfury Group, a global company specialised in the cryptocurrency and blockchain space. “Our platform will significantly change the way artists and their teams get paid," said Alsultany. "The market for music, videos, tickets, stems, digital collectibles, and digital assets is receiving a significant upgrade. Bitfury Surround will allow the creative forces in the entertainment industry to maximize revenue and ensure payment distribution in an innovative manner. The software stack and marketplace we are creating will be a game-changer to everyone in the music and entertainment ecosystem.”

Downtown taps Mike Smith to run its global music publishing division

By Emmanuel Legrand

US independent music company Downtown Music Holdings has rejigged the leadership of its music publishing division, with the appointment of former Warner Chappell UK MD Mike Smith to the newly created position of Global President of Downtown Music Publishing, effective September 1, 2020.

Mike Smith

  As a result, Downtown Music Holdings CEO Justin Kalifowitz , who had led the music publishing unit from the outset, will relinquish day-to-day operations at Downtown Music Publishing to focus on the overall strategy of the company that has grown over the past years to incorporate rights management company Songtrust, indie distributors CD Baby and FUGA, as well as services units Soundrop, DashGoSM and AdRev. In recent weeks, Downtown acquired South Africa's Sheer Publishing Africa and set up in London Downtown Neighbouring Rights. Smith will be based in London and will report directly to Kalifowitz.

The craft of songwriting

  “Since its founding in 2007, we’ve carefully built Downtown Music Publishing, writer by writer, guided by an appreciation for the craft of songwriting, a focus on creative partnership, and a belief that a global music company for the modern era should be rooted in an understanding that the song is a foundational element to everything else in the music business. The addition of Mike Smith as Global President of Downtown Music Publishing is in complete alignment with these principles and I know under Mike’s stewardship our publishing business is in the best of hands,” said Kalifowitz.

  Added Smith: "Downtown’s ability to build a formidable, twenty-first century music publishing company unencumbered by the baggage of the past has made them an impressive and compelling proposition for songwriters and composers, and I am delighted to become part of their vision."

SACEM's Jean-Noel Tronc elected President of GESAC

By Emmanuel Legrand

SACEM chief executive Jean-Noël Tronc has been elected President of GESAC, the European groupment of societies of authors, during the organisation's annual General Meeting. Tronc will serve for a two-year term. He replaces José Jorge Letria, President of Portuguese society Sociedade Portuguesa de Autores (SPA), who remains on the board of GESAC.

  Tronc said his mandate will focus first and foremost on the impact of the Covid-19 pandemic on the creative sector. “For authors, composers and music publishers that GESAC is fighting for, the COVID crisis strikes two times: they have lost massive direct revenues with confinement, they will lose major authors’ rights revenues in 2021, because of the delayed impact of 2020 losses for the users of their works, be it shops, media, live concerts, movie theaters, physical sales or exhibitions," said Tronc.

  He added, “The authors societies that GESAC represents will be also financially more fragile because of the fall in collections that will weaken their resources. We need to rethink EU priorities and make Culture and creation a vivid priority for the recovery plans and the EU Commission, Parliament and Governments agenda. In that perspective, GESAC carries and important responsibility: it represents creators from all arts and all origins; non profit collective management of rights is a European invented model where European authors societies still play a worldwide acknowledged leading role."

  Tronc will be chairing the GESAC Board, alongside three new Vice-Presidents, who were also elected at the meeting: Victor Finn, CEO of Irish authors’ society IMRO, András Szinger, CEO of Hungarian authors’ society Artisjus, and Harald Heker, CEO of German authors’ society GEMA. The GESAC Board also includes: Gaetano Blandini, CEO of SIAE (Italy), Karsten Dyhrberg Nielsen, CEO of STIM (Sweden), Gernot Graninger, CEO of AKM/Austromechana (Austria), and Carine Libert, CEO of SABAM (Belgium). GESAC regroups 32 of the largest authors’ societies in the European Union, Iceland, Norway and Switzerland.