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Posts Tagged ‘Music’
July 6th, 2020 at 2:32 pm
“Blanket Licensing” – a Collectivist, Bureaucratic, One-Size-Fits-All Deprivation of Property Rights Proposal
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America’s legacy of unparalleled copyright protections and free market orientation has cultivated a music industry unrivaled in today’s world or throughout human history.

From the first days of the phonograph, through the jazz age, through the rock era, through disco, through country, through hip-hop and every other popular musical iteration since its advent, it’s not by accident that we lead the world in the same manner in which we lead in such industries as cinema and television programming.  We can thank our nation’s emphasis on strong copyright protections.

Unfortunately, that reality doesn’t deter some activists from periodically advocating a more collectivist, top-down governmental reordering of the music industry in a way that would deprive artists and creators of their property rights.  Some advocates simply will not relent in their unceasing and misguided campaign to undermine copyright protections that have provided the wellspring for U.S. musical preeminence.  They seek to replace strong copyright protections and the freedom of market participants to mutually negotiate, ultimately to consumers’ obvious benefit, and replace them with a government-determined rate and a one-size-fits-all bureaucratic approach that eliminates market participants’ autonomy.

As just the latest example, British activist Cory Doctorow of the Electronic Freedom Foundation (EFF) now proposes a “blanket licensing” idea under which anyone wishing to offer music to pubic audiences would be required to open an account with a collecting society.  His heavily bureaucratic proposal would curtail the ability of copyright owners to negotiate royalties as they see fit with internet music platforms.

In an era of endless musical genres and methods to access them according to one’s preference, how does imposing such a collectivist, centralized, one-size-fits-all regime make sense?

The obvious answer is that it doesn’t.

Doctorow’s proposal betrays a fundamental flaw by misconceptualizing the nature of copyright itself by misstating “copyright’s real purpose:  spurring creativity and innovation.”

While Doctorow can be forgiven for his unfamiliarity with American constitutional principles, and while the utilitarian goal of creativity and innovation is indeed a primary feature of copyright and other intellectual property (IP) protections, that’s an inaccurate and incomplete statement of its “real purpose.”  Rather, copyright through common law and American constitutional history is valued as a natural property right of the creator, as we at CFIF articulated in our policy manual entitled ”The Constitutional and Historical Foundations of Copyright Protection”:

The Copyright Clause in the U.S. Constitution and the pre-existing rights it secures both arose from a long intellectual and historical tradition that reflected both the importance of economic incentives (the utilitarian argument) and the notion that individuals have an inherent and inviolable right to the fruits of their own labor.  As the Supreme Court has explained, ‘[t]he economic philosophy behind the clause empowering Congress to grant patents and copyrights’ is the conviction that:  ‘(1) encouragement of individual effort by personal gain is the best way to advance public welfare through the talents of authors and inventors in “Science and the useful Arts”’ and (2) ‘[s]acrificial days devoted to such creative activities deserve rewards commensurate with the services rendered.’  Mazer v. Stein, 347 U.S. 201, 219 (1954).  Another early decision emphasized that only through copyright protection ‘can we protect intellectual property, the labors of the mind, productions and interests as much a man’s own, and as much the fruit of his honest industry, as the wheat he cultivates or the flocks he rears.’  Davoll v. Brown, 7 F.Cas. 197, 199 (D. Mass. 1845).

Accordingly, Doctorow’s proposal violates the central concept that copyright holders possess a natural right to their creations.  Even ignoring the natural right foundation of copyright, however, no other system of copyright protection has resulted in greater utility than our own, given America’s uniquely prolific music industry as noted above.

In addition to violating the fundamental rights of copyright owners to mutually bargain with music platforms, Seth Cooper of the Free State Foundation cogently summarizes how EFF’s proposal doesn’t accord with the obvious realities of today’s music marketplace:

[T]he EFF plan sidesteps the fact that there are several major Internet music service providers and numerous smaller providers.  Popular interactive (or ‘on-demand’) streaming music providers include Spotify, Tidal, Apple Music, Amazon Music, and Google Play Music.  Popular webcasters include Pandora, iHeartRadio, and Deezer.  And there are many others.  SoundExchange reported that some 3,600 webcasting services were operating in 2019.

Importantly, consumer choices also include nationwide satellite radio broadcaster Sirius XM and local AM/FM radio broadcasters.  Indeed, radio broadcasts are widely available through apps on smartphones and other devices.  Additional choices include digital downloads from major Internet music service providers as well as independent and individual artist websites.  CDs and vinyl records are also available at retail.

Given the number of competitors and platform choices, it is highly unlikely that Internet music services possess market power – or the ability to charge consumers above-market prices and otherwise engage in anti-competitive conduct.  There’s no showing of market power here and so the case for government intervention falls apart.” 

Accordingly, the EFF proposal contravenes fundamental concepts of copyright protections, it proposes to reorder a music marketplace that continues to function well for all of its stakeholders and it clashes with contemporary market realities.

We currently enjoy a functional market with innumerable market participants, and copyright owners across the spectrum possess the freedom to negotiate with a wide variety of potential distributors.  EFF’s proposal nevertheless aims to strip creators of the property rights they currently enjoy without justification.  The market simply isn’t broken.  Supporters of EFF’s proposal curiously assert that today’s market is corrupted by monopolies, but as Mr. Cooper sets forth nicely above, a broad global spectrum of potential avenues exist for consumers to freely access as they prefer.

Accordingly, the notion that we should upend a market in which consumers can access an ever-greater variety of music at low cost is an untenable one.

A better option would be for Congress to expand copyright holders’ protections to the sphere of terrestrial radio via the Ask Musicians for Music Act (AMFM Act), to extend what we know works, rather than foolishly venture into demonstrably defective novel proposals.

April 11th, 2018 at 5:17 pm
Great News: Comprehensive Music Reform Legislation Introduced in Congress
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CFIF steadfastly supports America’s world-leading tradition of strong intellectual property rights, which have made us the most creative, inventive and prosperous nation in human history.

That includes the music industry, which stands unrivaled in terms of worldwide influence and fecundity, but which we’ve noted merits attention from Congress:

Under byzantine laws, artists receive just compensation whenever their post-1972 recordings are played, but in many cases not for their pre-1972 recordings.  That’s an indefensible and arbitrary artifact that has persisted far too long.  Why should Neil Diamond receive payment whenever ‘America’ is played, but not classics like ‘Solitary Man?’

Fortunately, the opportunity to correct that unfairness has arrived.  Even better, legislation to correct the existing flawed system arrives alongside other music legislation that galvanizes the coalition to finally correct the situation.  As a result, a broad coalition of music organizations representing everyone from songwriters, composers, performers, publishers and labels support three new pieces of legislation…”

Well, this week offers very welcome news.

The Music Modernization Act (H.R. 5447) has been introduced in Congress, as cogently summarized by the musicFIRST Coalition:

Introduced by House Judiciary Committee Chairman Bob Goodlatte (R – VA) and Ranking Member Jerrold Nadler (D – NY), the Music Modernization Act combines music licensing reforms outlined in the CLASSICS Act, Songwriters Equity Act of 2015, the rate standard parity provisions of the Fair Play Fair Pay Act, and AMP Act into a single, consensus piece of legislation.  The MMA addresses specific music legacy issues such as establishing federal copyright protection for artists who recorded before 1972, creating a single licensing entity to administer music publishing rights for all digital music and ensuring producers and engineers receive royalties for their contributions to the music they help create.

The consensus legislation introduced today in the House would not have been possible without the leadership from Chairman Goodlatte, Ranking Member Nadler, Rep. Doug Collins (R – GA), Rep. Darrell Issa (R- CA), Rep. Hakeem Jeffries (D – NY) and other leaders from both parties who worked together to craft legislation that is broadly supported by the entire music industry, streaming services and music creators.”

This legislation is long overdue.  CFIF therefore applauds the Committee for its unanimous support, and urges swift passage by the House to finally rectify the existing unfairness in the nation’s music laws.

February 5th, 2018 at 1:47 pm
Music Industry Fairness – 2018 Offers a Perfect Opportunity for Reform
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We at CFIF have long advocated greater fairness for musical performers in securing fairness for their performance rights.

Under byzantine laws, artists receive just compensation whenever their post-1972 recordings are played, but in many cases not for their pre-1972 recordings.  That’s an indefensible and arbitrary artifact that has persisted far too long.  Why should Neil Diamond receive payment whenever “America” is played, but not classics like “Solitary Man?”

Fortunately, the opportunity to correct that unfairness has arrived.  Even better, legislation to correct the existing flawed system arrives alongside other music legislation that galvanizes the coalition to finally correct the situation.  As a result, a broad coalition of music organizations representing everyone from songwriters, composers, performers, publishers and labels support three new pieces of legislation, as summarized cogently by the Recording Industry Association of America (RIAA):

The Music Modernization Act would be the most significant update to music copyright law in over a generation, and represents unprecedented compromise across all aspects of the music industry.  The bill reforms Section 115 of the U.S. Copyright Act to create a single licensing entity that administers the mechanical reproduction rights for all digital uses of musical compositions – like those used in interactive streaming models offered by Apple, Spotify, Amazon, Pandora, Google and others.  It also repeals Section 114(i) and, consistent with most federal litigation, utilizes random assignment of judges to decide ASCAP and BMI rate-setting cases – two provisions that will enable fairer outcomes for songwriters and composers.

The CLASSICS Act (Compensating Legacy Artists for their Songs, Service, & Important Contributions to Society Act) would benefit artists and music creators who recorded music before 1972 by establishing royalty payments whenever their music is played on digital radio.  SoundExchange would distribute royalties for pre-1972 recordings played by Internet, cable and satellite radio services just as it does for post-1972 recordings.  Currently, only sound recordings made after 1972 receive payments from digital radio services under federal law.

The AMP Act (Allocation for Music Producers Act) for the first time adds producers and engineers, who play an indispensable role in the creation of sound recordings, to U.S. copyright law.  The bill codifies into law the producer’s right to collect digital royalties and provides a consistent, permanent process for studio professionals to receive royalties for their contributions to the creation of music.”

Unfairness has persisted too long in America’s system of compensating musicians for performance of their songs.  The emerging coalition coalescing around these key pieces of legislation, which CFIF strongly urges all members of the House and Senate to support, and the White House to sign, allow a unified effort to finally bring reform in 2018.

October 30th, 2015 at 10:06 am
CFIF in Wall Street Journal: Gov’t Shouldn’t Pick Winners in Music Creator/Digital Broadcaster Negotiations
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This morning, The Wall Street Journal kindly included CFIF’s take on the ongoing compensation rate negotiations between music creators and digital broadcasters.  Simply put, our position is that the federal government shouldn’t be in the business of favoring one side or the other.  In an optimal world, the free market would dictate rates and the federal government would play no role.  Because current law mandates that federal regulators at the Library of Congress determine the rate that music creators receive when digital broadcasters play their songs, however, it is critical that regulators remain neutral rather than unfairly favoring one side or the other:

We agree with Bartlett Cleland that free-market negotiation between music creators and Internet broadcasters, not federal regulators, should optimally determine broadcast compensation rates.  Until that time, however, we respectfully disagree that regulators should artificially favor the streaming services industry.  Digital broadcasters possess no inherently superior right to their business model than do musicians, but Mr. Cleland’s suggested course unjustifiably favors the former over the latter.  If anything, artists possess the superior claim, since without their creations digital radio wouldn’t have that product to offer consumers.  And if streaming services consider payment requirements excessive, then they can adjust what they charge advertisers or subscribers to sustain their model.

The federal government should not be in the business of playing favorites.

Timothy Lee

Center for Individual Freedom, Alexandria, Va.

October 13th, 2015 at 4:25 pm
Congress Stands Up Against Obama’s Attempt to Surrender Global Internet Oversight
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In March of 2014, the Obama Administration foolishly announced its intent to relinquish oversight of Internet domain name functions to the so-called “global stakeholder community.”

That is a dangerous idea for innumerable reasons, as observers like L. Gordon Crovitz of The Wall Street Journal have chronicled well.  Among other risks, consider the piracy threat that surrendering U.S. oversight poses to critical American artistic industries like music and film.  Online piracy already constitutes an enormous problem to those world-leading industries, and allowing Internet governance to drift into a Hobbesian global abyss would only exacerbate that.  Or consider the censorship threat, as Crovitz recently referenced:

Since the launch of the commercial Internet, the Internet Corporation for Assigned Names and Numbers, or Icann, has operated under a contract from the U.S. Commerce Department.  American oversight freed engineers and developers to run the networks without political pressure from other governments.  China and Russia can censor the Internet in their own countries, but not globally because Washington would block tampering with the “root zone” of Web addresses.”

Fortunately, some in Congress aren’t sitting passively as the Obama Administration attempt yet another international capitulation.  In a recent letter to U.S. Comptroller General Gene Dodaro, Senators Charles Grassley (R – Iowa) and Ted Cruz (R – Texas) and Congressmen Bob Goodlatte (R -Virginia) and Darrell Issa (R – California) remind the Administration that it cannot dispose of U.S. property without Congressional consent:

The Internet as we know it has evolved from a network infrastructure first created by Department of Defense researchers.  One key component of that infrastructure is the root zone file, which the federal government currently designates as ‘a national IT asset.’  Creation of the root zone file was funded by the American taxpayer and coordinated by the Department of Defense, and the file has remained under United States control ever since.  Under Article IV, Section 3 of the Constitution, Congress has the exclusive power ‘to dispose of and make all needful rules and regulations respecting the territory or other property belonging to the United States.'”

Surrender of Internet oversight to a “global community” increasingly dominated by the likes of China, Russia, Iran and other rogues poses a terrible risk.  Fortunately, our Constitution presents a roadblock to the Obama Administration’s latest folly.  Even more fortunately, we have people like Senator Grassley, Senator Cruz, Congressman Goodlatte and Congressman Issa ready and willing to defend it.

July 28th, 2015 at 3:47 pm
Congress Should Oppose the So-Called “Local Radio Freedom Act”
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Elementary concepts of fairness demand that musical artists and performers remain free to negotiate performance rights with broadcasters that seek to play their songs.  Indeed, current law allows artists to mutually bargain with satellite, Internet and cable stations.

The only exception:  traditional AM-FM radio stations, which are unfairly protected by federal law from having to negotiate with artists for performance rights.  This is precisely the sort of crony capitalism against which the American electorate is increasingly irate.

Unfortunately, rather than advocating market reform, some in Congress wish to cement the current protectionist status quo.  Under the so-called “Local Radio Freedom Act,” whose very name contradicts its real-world effect, terrestrial radio’s unjustifiable exemption from having to negotiate performance rights would be made more permanent.  The bill would foreclose bargained-for negotiation between artists and stations for compensation, perpetuating stations’ ability to earn billions by playing songs without paying for them.  And in an example of of supreme chutzpah, the same traditional radio stations benefiting from that loophole turn around and ask Congress to require cable and satellite providers to pay them for retransmission of television programs of stations they happen to own.

The bill’s proponents advance the offensive claim that artists seeking payment should just shut up and appreciate that their works get played over the air, thereby providing them publicity and advertising.  But that’s not something that stations should dictate.  The creators and performers of those songs should be free to determine which market model they prefer – performance for payment or free of charge.  That’s how a free market works.

Accordingly, we at CFIF have joined an array of fellow free-market organizations in a letter to Congress stating our objections to this protectionist and crony capitalist proposed legislation:

We urge you to refrain from co-sponsoring the Local Radio Freedom Act, which sanctions the status quo, and has a chilling effect on the development of a forward-thinking policy that respects the rights of all music producers in all media.  The Constitution protects private property rights and specifically delegates to Congress the authority to protect creative works.  Unfortunately, LRFA closes the discussion about how to best protect property rights by resolving that terrestrial radio should never pay performance royalties on music broadcast on their stations used for raising advertising revenue.  This is not equitable treatment for any musical artist or music distribution service.”

Americans are justifiably fed up with the sort of protectionism and cronyism that this proposed legislation represents.  We accordingly urge Congress to reject it, and that our hundreds of thousands of supporters and activists across the country to contact their representatives in Congress and express their opposition as well.

June 29th, 2015 at 1:03 pm
Protectionist “Local Radio Freedom Act” Would Prevent Payment to Musicians for Songs
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Under current law, recording artists remain free to negotiate performance payment rights with Internet, cable and satellite stations.  Due to an unfair exception, however, artists cannot negotiate in the same manner with traditional AM-FM radio.  Unfortunately, proposed federal legislation backed by broadcasting interests would cement that anomaly.  Deceptively entitled the “Local Radio Freedom Act” (“LRFA”), the bill would stifle a potentially freer marketplace and foreclose future negotiation for payment to musicians for songs.

If successful, that would perpetuate terrestrial radio broadcasters’ ability to exploit a legal loophole allowing them to earn billions of dollars by playing songs whose artists would remain uncompensated.  Exacerbating matters, those same terrestrial broadcasters simultaneously ask Congress to require cable and satellite providers to pay them for retransmission of television programming from stations that they own.  That similarly violates straightforward concepts of fairness and intellectual consistency.

This past January, CFIF joined an array of other free-market organizations in a letter to Congress opposing the LRFA and setting forth the policy basis for our objection:

The Constitution protects private property rights and specifically delegates to Congress authority to protect creative works.  Unfortunately, LRFA closes the discussion about how best to protect property rights by resolving that terrestrial radio should never pay performance royalties on music broadcast on their stations used for raising advertising revenue.  That is not equitable treatment for any musical artist or music distribution service.”

Fortunately, there’s a superior alternative also before Congress.

Representative Marsha Blackburn (R – Tennessee), perhaps the most reliable advocate of property rights in Congress, has joined Representatives from both parties in introducing the Fair Play, Fair Pay Act of 2015.  This bill would correct the existing unfairness described above by finally requiring terrestrial broadcasters to negotiate with artists who seek compensation for broadcast of their creative works.

Advocates of LRFA claim that artists have no reason to complain when terrestrial radio plays their works without compensation, since that provides them publicity and free advertising.  But that’s something for artists and broadcasters to freely negotiate, rather than have broadcasters make that decision for them and deprive them of choice in the matter.  Some artists may indeed opt to allow their works to be broadcast for free.  But as Taylor Swift just illustrated in standing up for her rights, other artists have a right to disagree and negotiate payment for those playing their songs.

CFIF believes that property rights, including intellectual property (IP) rights for artists and musicians, must be fiercely defended.  America’s foundation of strong IP protections is one reason we’re the most innovative and artistically productive nation in human history.  Accordingly, we encourage our supporters and activists to contact their representatives, demanding that they reject the dangerous LRFA and support Rep. Blackburn’s PRMA.

April 29th, 2015 at 4:29 pm
Rep. Blackburn Introduces Important Property Rights Bill – The Protecting the Rights of Musicians Act (PRMA)
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Representative Marsha Blackburn (R – Tennessee) is perhaps the most steadfast property rights advocate in Congress.  In that vein, she has joined Rep. Anna Eshoo (D – California) in introducing another important piece of proposed legislation:  the Protecting the Rights of Musicians Act (PRMA).

Under current law, terrestrial radio broadcasters exploit a loophole that allows them to play songs without compensating artists who created and performed them.  That stands in contrast to other forms of radio transmission – including satellite and Internet radio – that justifiably pay the performers whose songs they play.  Terrestrial radio companies thus earn billions of dollars in advertising revenues largely on the basis of songs for which artists remain uncompensated, contrary to fairly straightforward concepts of fairness.

Ironically, some of the companies that own those terrestrial radio stations turn around and ask Congress to require cable and satellite providers to compensate them for retransmission of television programming of stations they own.  Fair enough that they be paid for such retransmission, but the same logic should in turn apply to their own radio programming.

Representative Blackburn’s proposed PRMA would correct that ongoing unfairness by requiring broadcasters to practice what they preach and pay performers for the works they’ve worked hard to create.

Importantly, the legislation would also interrupt broadcasters’ effort to force tech companies to include an analog FM radio chip in smartphones and other mobile devices.  If device manufacturers wish to include FM chips in their products, that’s all well and good.  Indeed, many already do.  And if consumers demand products that include them, then the market will respond accordingly.  But it’s simply not something the federal government should be dictating.

By the way, that FM chip mandate proposal is also a sneaky way for terrestrial broadcasters to expand their exploitation of playing songs without compensating artists.  After all, as noted above, Internet broadcasters must pay artists under current law.  But by asking the federal government to compel FM chip inclusion, terrestrial broadcasters would be able to expand their loophole to mobile devices.

That is the epitome of crony capitalism.

We at CFIF remain strong defenders of property rights, including intellectual property rights for artists and musicians.  Accordingly, we applaud Rep. Blackburn for her leadership on this issue, and encourage our supporters and activists to ask their own elected representatives to stand alongside her.

April 13th, 2015 at 2:20 pm
Music Equity: Fair Play Fair Pay Act Introduced in Congress
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We at CFIF strongly support free markets and property rights.  That includes the rights of music writing and recording artists, who deserve to enjoy the fruits of their labor, which should not be affected by the means via which their creations are transmitted.  Unfortunately, however, current law leaves them with no effective rights when it comes to terrestrial radio.

We also support legislation to correct the historical anomaly that digital radio broadcasters pay royalties for the privilege of playing songs recorded after the arbitrary date of February 15, 1972, but not for pre-1972 recordings.

As we stated in June of last year, the anomaly is due to a quirk in federal law, one that has unfair consequences:

Recordings predating 1972 remain protected by a patchwork of state laws, whereas recordings after February 15 of that year going forward are covered under federal law.  That amounts to a historical idiosyncrasy, without any prevailing substantive logic.  But digital radio stations, some of which center entirely upon pre-1972 music, have capitalized on the legal aberration to simply stop paying for performance of the pre-1972 songs still covered by state laws.  Estimates of royalties lost as a result reach $60 million per year.

As a result, the Righteous Brothers’ “You’ve Lost that Lovin’ Feelin’” receives no payment, but Hall & Oats’s remake does.  The Rolling Stones’ “(I Can’t Get No) Satisfaction” is not compensated, but Devo’s remake is.  The Beach Boys get paid for “Kokomo” but not “Good Vibrations.”  This situation has also led to numerous lawsuits spanning various states, adding further legal complexity and uncertainty for artists, consumers and digital broadcasters alike.

Digital radio stations operate under privilege of federal license to broadcast, but take the position that they need not pay for pre-1972 songs that remain protected under state laws.  They profit from playing those songs, but refuse to pay accordingly.  Keep in mind that unlike contemporary performers, many of those older affected artists are no longer capable of touring, and sales of their records have diminished over the years, leaving royalties for performance of their songs as their only remaining means of continuing compensation.”

We have noted how various state courts have overturned that anomaly within their jurisdictions, but it’s time that the same fairness was extended at the federal level.

Fortunately, bipartisan legislation introduced in the House today by Rep. Marsha Blackburn (R – Tennessee) and Jerry Nadler (D – New York) aims to resolve these forms of unfairness.

Entitled the “Fair Play Fair Pay Act of 2015,” the bill would end the way in which federal law props up AM/FM radio and exempts them from paying artists for performance of their songs.  Also under the bill, digital radio stations that enjoy federal broadcast privileges would finally be obliged to provide royalties for songs recorded prior to 1972, in the same way they already pay for songs recorded after 1972, in order to maintain their licenses.

The Fair Play Fair Pay Act offers a corrective to years of unfairness in the industry, and it’s something that conservatives, libertarians and anyone who values property rights should support.