Thursday, December 19, 2013

Rate Court Rules on Digital Rights: Different Outcomes for ASCAP, BMI Against Pandora

Pandora's battle with the PROs was further defined this week when a rate court judge handed down its decision in a case between Pandora and BMI. The issue in question was Pandora's license to utilize BMI's repertoire as a part of its digital radio service. In September, a separate rate court judge ruled on a similar case between Pandora and ASCAP.

Earlier this year, several publishing companies signaled their intent to withdraw their digital rights from BMI and ASCAP beginning Jan. 1, 2014, stemming largely from the two PRO's limited ability to negotiate with companies like Pandora because of the federal consent decree under which they are required to operate. In response, Pandora asked the rate court to rule on the legality of this partial withdrawal of rights by the publishers, which if allowed, would require Pandora to negotiate new deals directly with each publisher in order to continue using their music. Here's a summary of the rulings in each case:

ASCAP/Pandora ruling (September 2013): Judge Denise Cote ruled that a partial withdrawal of rights is not allowed under the consent decree, and that ASCAP must make all of its repertoire available to all licensees. Thus, Pandora has the right to utilize all of ASCAP's music in its digital radio service until it's license with ASCAP ends on Dec. 31, 2015. Publisher's may withdraw their grant of rights at that time, but only if they withdraw from ASCAP entirely.


BMI/Pandora ruling (December 2013): Judge Louis L. Stanton ruled that a partial withdrawal of rights is not allowed under the consent decree, but that Pandora's license with BMI does not include the music from the publishers in question because they signaled their intent to withdraw their rights at the same time the BMI/Pandora license was renewed, on Jan. 1, 2013. Now, given that a partial withdrawal is not allowed, these publishers will either need to withdraw from BMI completely on Jan. 1, 2014 (in which case Pandora would need to negotiate with each publisher separately to continue using its music), or not cancel the withdrawal and remain with BMI for all licensees (in which case Pandora will be able to continue using its music under the current terms).


So, while each ruling differed in the details, the general consensus is that a partial withdrawal of rights is not allowed under the current consent decree. Publishers are either all in, or all out. In the meantime, rate court proceedings are currently underway that will decide the rate Pandora must pay ASCAP for its license. If the rates are set favorably for ASCAP, the publishers may not be in such a hurry to leave after all. But if not, it will be interesting to see what decisions are made when the ASCAP/Pandora license expires at the end of 2015.

Monday, August 5, 2013

Representatives Blackburn and Chu Call for Fair Payments to Songwriters

Representatives Marsha Blackburn (R-Tenn.) and Judy Chu (D-Calif.) recently wrote an Op-Ed in "The Hill" calling for fairer payments to songwriters by digital music companies for the public performances of music. As the debate over copyright reform continues to move forward in Congress, it's critical that the artist community speaks out to encourage these representatives and others to take action and help rectify the current imbalance in the system. As we've written here before, music creators and distributors need each other. There is value in what each does, and they should each reap the benefits of their work. But this needs to be done so fairly. Ultimately, this whole business starts with the song (or composition). So let's help make sure songwriters and composers are able to keep writing the beautiful music that they do.

You can read Reps. Balckburn and Chu's article, "Stop short-changing songwriters" here:

And if you'd like to encourage these representatives with a note of your own, you can do so at:

Monday, June 17, 2013

ASCAP's Paul Williams Makes it Sound So Simple....

On Wednesday, June 5th, ASCAP President and Chairman Paul Williams delivered an incredibly powerful keynote speech to attendees of the CISAC World Creators Summit in Washington, DC. With clear and simple prose, graceful flow and convincing passion, he successfully crystallized the uncertainty and unfair exploitation that many artists face in today's digital market, while reiterating the request that artists be treated justly, and paid fairly. You can read the full text from his speech at the link below, and we certainly encourage you to do so. Well said, Paul!

Monday, April 8, 2013

Get with the Net: Licensing Music for Digital Media

As part of the 2013 NAB industry conference gathering, on Monday April 8th at 6pm the Production Music Association (PMA), in conjunction with PMA board member and AMM founder Joel Goodman, will present "GET WITH THE NET: LICENSING MUSIC FOR DIGITAL MEDIA". Together, they have assembled a high profile panel of digital media executives to discuss the major issues facing production music copyright owners in today's digital media landscape. Topics will center around rights and monetization with specific focus on sync licensing, advertising revenue sharing, and public performance licensing. For those attending the panel, please be sure to read the following articles, each of which raise important issues related to the discussion. Please leave all questions, comments, or follow up information from the panel as a comment here on this page. Also, the panel will be videotaped, so be sure to check back for updated links and coverage.


“Universal Music Publishing Inks Deals with Fullscreen, Maker Studios”

“YouTube, Partners Needs to Work Harder to Pay Songwriters, Publishers Fairly: Guest Post by Matt Pincus”

“Direct to Digital: How Sony/ATV's Deal with Pandora Affects the Music Business”

“Business Matters: 7 Areas for Possible Copyright Reform in the Music Business”


WHEN: Monday, April 8th – 6:00pm – 9:00 PM
WHERE: Las Vegas Hotel (previously known as the Las Vegas Hilton) Ballroom B

Joel Goodman - Moderator
Ryan Born - CEO, AdRev
Todd Brabec - Attorney/Consultant/Educator/Author
Scott Sellwood - Strategic Partner Development Manager, YouTube
Paul Friedman - Senior Vice President - Music Affairs, Sony Pictures
Adam Taylor - President, APM Music

Tuesday, February 26, 2013

Vote for the Future of ASCAP: A Guide to the ASCAP Board of Directors Election


Once every two years, you have the unique opportunity to elect a new board of directors and task them with an essential fiduciary responsibility that significantly influences both your earnings and career. Now, that time has come again. But for many of you who rely so heavily on performance royalties yet fail to involve yourself in the election process, it is a missed opportunity. ASCAP prides itself on being "the only U.S. performing rights organization created and controlled by composers, songwriters and music publishers, with a Board of Directors elected by and from the membership", but this statement is only as good as the actions of the members themselves. To stand by idly or uninformed is to put the decisions that affect you directly in the hands of others, and often few. So with the election upon us, now is the time to act on your responsibility as a member and make sure your voice is heard. With that in mind, we've put together this mid-level guide to the ASCAP Board of Directors election process so that you can make an informed decision.


Since ASCAP represents both writers and publishers, ASCAP's Board of Directors is made up of 12 writer members, and 12 publisher members. Once the board is elected, they in turn elect the Officers of the Society, namely the Chairman of the Board (who is always a writer members), two Vice Chairmen (one writer and one publisher), a Secretary and a Treasurer (neither of whom are required to be board members). But how does the board get there in the first place? We'll start from the beginning...

The Selection Committees:
The election process effectively starts with the Chairman of the Board, who is responsible for appointing two Selection Committees. The Chairman chooses three writer-members to make up the Writers Selection Committee, and three publisher-members to make up the Publishers Selection Committee. It is the responsibility of each of these committees to select their corresponding Nominating Committee.

The Nominating Committees:
The Writers Selection Committee chooses five writer members, whom are not board members and whom do not intend to run for election, to make up the Writers Nominating Committee. Similarly, the Publishers Selection Committee chooses five publisher members to make up the Publishers Nominating Committee. Since it is the job of each nominating committee to choose the candidates whom will be running for election, ASCAP's Articles of Association states that "the Selection Committees shall choose members of the Nominating Committees mindful of the diversity of the Society’s membership and repertory." In theory, the Selection Committees should appoint people who will in turn select nominees that accurately represent the breadth and depth of ASCAP's membership.

Who Gets Nominated?

There are effectively three scenarios that will lead to a nomination, and thus a space on the election ballot:

1) All incumbent board members are automatically re-nominated unless they explicitly choose not to run;

2) The Nominating Committees must nominate at least 12 non-incumbent writers and 6 non-incumbent publishers, again "mindful of the diversity of the Society’s membership and repertory.";

3) Any eligible writer or publisher who collects a number of signatures from other eligible writers or publishers equal to 5/8% of the total writer or publisher membership.

Let's look a bit closer at what this all means. The first scenario tells us that incumbent board members have an inside track as they are no longer subject to the Nominating Committees' processes or petition requirements. Further, since there is no term limit on board membership, there is likewise no limit on this privilege.

In the second scenario, it is important to note that at least 12 non-incumbent writers and 6 non-incumbent publishers are to be nominated. If an incumbent decides not to run, the Nominating Committee will nominate additional candidates to account for these new vacancies. Thus, it is guaranteed that there will always be at least 24 writer candidates and 18 publisher candidates on the ballot. To the best of our knowledge, there is no published criteria or qualifications that the Nominating Committee uses to make their selections. Further, the names of the Nominating Committee members are only made public once the ballots have been sent out.

Finally, we come to the third scenario - nomination by petition. As the requirements currently stand, this is an incredibly difficult nomination to achieve. To start, we have been told that the absolute equivalent of 5/8% of the total writer membership is approximately 1,800. We do not know the equivalent for publisher members, but surely it too is high. Second, these totals are made up of both earning and non-earning members, however signatures are only recognized when provided by members who have received a performance credit within the last year (earning members). This puts the candidate at a gross disadvantage from the start. And without a published list of earning members by year to reference, it is very difficult for a candidate to determine how many members they can choose from to solicit signatures, let alone who these members are.


The election itself is overseen by the Committee on Elections, which is actually just the combined members of each Nominating Committee. They are responsible for preparing the ballots (to be approved by the current board), distributing and collecting them from each active member in good standing, appointing independent tellers to total, tabulate and count the votes cast, and determining the rules by which the appointed tellers do so.

Breaking Down the Ballot:
Here's a link to this year's writer-member ballot (click here). As you can see, there are 24 candidates total, including 11 incumbents running for re-election (marked with an asterisk). Twenty-two of the 24 candidates are running against each other as "At-Large Directors", while two of the 24 candidates run separately to become the Symphony and Concert Director. This is because ASCAP's Articles of Association dictate that at least one symphonic and concert writer member, and one such publisher member, shall be on the board at all times. The number of votes unique to each voting member is listed in a box in the top right-hand corner of the ballot.

Accompanying the ballot is a document that includes statements and bios from all 24 candidates, as well as an introduction from the members of the Writers Nominating Committee. This is the first public record that details both the candidates and Nominating Committee members. Voters have approximately one month to research their candidates and cast their votes, which must be received before midnight, March 22, 2013.

Voting instructions are listed on the reverse side of the ballot, and can be seen by clicking here. Per these instructions, members are to vote for up to 11 At-Large Directors and one Symphony and Concert Director by placing an "X" next to each desired name. Those wishing to write-in other candidates of their choosing can do so in the blank spaces provided. For the first time this year, members can also vote online by visiting

How Voting Works:
So far, the entire process has been defined by membership class - i.e. writer members and publisher members. The same holds true for voting. Only writer members can vote for writer candidates, and only publisher members can vote for publisher candidates. Further, only members who have received performance credits within the latest preceding fiscal survey year are entitled to vote.

Perhaps most important, however, is the fact that members' votes are not equal. Each member has the potential to receive up to 100 votes, but most do not reach this limit. The number of votes a member receives is based on two factors: 1) the number of performance credits the member has accumulated over the last year; and 2) a graduated credit bracket that makes it harder to receive votes as more credits are accumulated. Here's how it breaks down:

Writer Member Credit Bracket
Credits Range Receive One Vote Per Vote Potential (Cumulative Total)
All All 1 (1)
1-18,000 900 credits 20 (21)
18,001-23,400 1,800 credits 3 (24)
23,401-31,500 2,700 credits 3 (27)
31,501-45,900 3,600 credits 4 (31)
45,901-90,900 4,500 credits 10 (41)
90,9001< 5,400 credits 59 (100)*

Publisher Member Credit Bracket
Credits Range Receive One Vote Per Vote Potential (Cumulative Total)
All All 1
1-90,000 3,600 credits 25 (26)
90,001-126,000 7,200 credits 5 (31)
126,001-180,000 10,800 credits 5 (36)
180,001-367,200 14,400 credits 13 (49)
367,2001< 18,000 credits 51 (100)*

* Per ASCAP's Articles of Association, no member shall have more than 100 votes

As you can see, every member who has earned a credit during the last year gets one vote. In order to secure additional votes, you must have earned the necessary number of credits per vote based on your corresponding credit bracket. As far as we can tell, the total number of votes that a member has is only listed on the ballot (in the top right-hand corner of our example), and is not available anywhere else ahead of time.

What may not be abundantly clear, however, is how your votes are allocated to the candidates you vote for. While this explanation is not detailed in the Articles of Association, or other documentation readily accessible to members, each candidate you vote for receives the full number of votes you are entitled to cast. So, let's say you have 12 votes. If you decide to only vote for one candidate, 12 votes will go to that one candidate. If you vote for two, they each get 12 votes. Selecting 12 different candidates gives 12 votes to each. So what does this mean exactly? Well, it means you should only vote for those candidates who you want to be on the board. Just because there are 12 slots doesn't mean you need to cast 12 votes. In fact, if you really only have two preferred candidates, you may hurt their chances by giving votes to others. It's ultimately your choice, but something that's very helpful to be aware of.

After all votes have been counted, the candidates with the highest number of votes are deemed to be elected. Such names, along with the number of votes received by each (which historically has not been made public), are then presented to the current Chairman of the Board for announcement to the membership.


The Articles of Association clearly states that "the Board of Directors shall, as far as practicable, represent writer members and publisher members with different participations in the Society’s revenue distributions and who reflect the diversity of the Society’s repertory and membership." But this can only be ensured with your participation. It's your livelihood at stake. Your career on the line. And while it may at times seem like a "closed door" operation, just remember the core principles that ASCAP prides itself on. This is a member controlled organization. So be an active member. Reach out to your officers and board members. And most importantly, be sure to cast your vote.

Thursday, January 31, 2013

Direct to Digital: How Sony/ATV's Deal with Pandora Affects the Music Business

What's the Big Deal? 

On January 17th, 2013, news broke that Sony/ATV Music Publishing negotiated a one-year direct licensing agreement with internet radio service provider Pandora. Notably, the deal increases by 25% the amount of money Pandora will pay Sony/ATV for the public performance of its works.

A Brief Background

Until the end of 2012, Sony/ATV (which now also administers EMI Music Publishing's catalog following Sony Corp.'s acquisition of the assets last year) utilized ASCAP and BMI to license the digital rights to its catalog. Effective January 1, 2013 it has pulled these rights from both organizations' purview. "Why?" you might ask. Well, ASCAP and BMI are bound by consent decrees that substantially limit their ability to negotiate license rates. And representing a catalog of over 2.5 million works, Sony/ATV is currently the world's largest music publisher. Pandora needs Sony/ATV, plain and simple. So by going direct, Sony/ATV maintained considerable negotiating leverage while reducing their limitations (i.e. Sony/ATV is not bound by a consent decree or compulsory license rates). The short term benefits to the company were clear, and it did what it believed to be in the best interests of its songwriters and its bottom line. Says Martin Bandier, Chairman/CEO of Sony/ATV and board member of both ASCAP and NMPA, "This is an historic deal and positions our songwriters well. I am sure that other songwriters and publishers will make their own arrangements soon. For the first time ever, we were able to negotiate for something that doesn't have a compulsory license and we were free to use market conditions in our negotiations. That is truly monumental." (source)

Looking Beyond

So what does this mean for the industry at large? How might this impact other publishers and other digital music service providers (DSPs)? What about ASCAP and BMI?

To start, other major publishers will surely see this as an opportunity to follow suit, not just with Pandora, but potentially with many other DSPs too. The precedent has been set, and most DSPs know that if they want to stay competitive, they need the big players on board.

What then for the smaller, independent publishers? While the majors may find less value in the collective bargaining offered by ASCAP and BMI, the indies rely heavily on the services of these PROs. They don't have the leverage (i.e. large catalogs) to negotiate equitable rates on their own, nor the resources to manage a portfolio of individual agreements with many DSPs. Likewise, most DSPs are surely not set up to take on negotiations with the thousands of independent music publishers out there.

Picturing PROs

So this then begs the question - can ASCAP and BMI effectively represent the independent publishing community should the majors all choose to go direct? Well, there are a few things to consider when addressing this question. The first is that, without the rights to the major publishing catalogs, ASCAP and BMI are at a negotiating disadvantage. They no longer represent everything that a DSP truly needs to effectively operate. It is also very possible that, if negotiations are taken to rate court (as they currently are between ASCAP and Pandora), the court will uphold the DSP's right to an Adjustable Fee Blanket (AFB) license from the PROs, which effectively means that the DSP can "carve out" the money they pay to their direct licensors (in this case, the majors) from the fees they pay to ASCAP and BMI.* This would mean less money for the PROs, and thus less money for independent publishers.

Stepping back, it's worth considering what history can teach us. Twenty-five years ago, cable television was a nascent form of media that paid dismally low performance royalty rates to the PROs, much like digital streaming sites today. But publishers stayed the course, leaving their rights in the hands of these organizations, trusting that the power of collective bargaining would pay off. And it did. Cable television is now one of the most significant revenue streams for the PROs, and thus for its publishers and songwriters. So we must ask - is a tendency towards direct licensing really good for the long term health of our industry? What becomes of an increasingly fragmented licensing environment? The PROs currently collect close to $2 billion each year. What happens to this money when catalogs start fending for themselves? Will the indies be hung out to dry? Will songwriters, who currently get 50% of all performance monies distributed by the PROs, receive less as they become subject to the potentially less favorable terms of their publishing deals?

On the flip side, direct deals executed by the majors could act as real world indicators of the fair market value of public performance rights. Thus it is also possible that, if negotiations between ASCAP/BMI and a DSP are taken to rate court (again, the current ASCAP/Pandora suit may provide the most immediate results), the judge may set a rate more favorable to the PROs, pointing to the existing and now higher major publisher deals for justification. As the majors continue to negotiate increasingly favorable rates directly, the independent community could benefit too.

Dancing with DSPs

Finally, we have the DSPs. Pandora in particular has been very public in its pursuit of lower royalties across the board, and it's hard to imagine other DSPs complaining if they succeed in any respect. But seeing Pandora agree to an increase in publishing royalties exemplifies the unique negotiating position that publishers (in particular the majors) have. Pandora operates by exploiting two basic copyrights - the public performance of songs and the public performance of recordings. The right to publicly perform sound recordings digitally is offered as a compulsory license, meaning that as long as a DSP pays the statutory rate set by the Copyright Royalty Board, they can perform any recording they like without having to engage the labels. But the right to perform compositions is controlled wholly by the copyright owner, meaning all usages must first be negotiated with the publisher. Considering that all sound recordings encompass an underlying composition, the publishers (in particular the majors) really hold the keys to the DSPs' cars.

Now consider that, until this deal, Pandora was only paying 4% of its revenues to songwriters and publishers, while it paid roughly 50% to artists and labels. "How could this be so lopsided, considering the publishers' negotiating position?" you might ask. Further, is a song's value really that different from and artist's performance? Well, as mentioned earlier, the consent decrees to which ASCAP and BMI are bound have greatly impaired their abilities to negotiate. But circumventing the PROs, as Sony/ATV has done, avoids this limitation. So why did Sony/ATV only ask for a 25% increase, bringing their effective royalty to 5%? That's a good question, but perhaps they're just testing the waters, waiting to see how things shake out from here. Says Bandier, "We only made the deal for one year so we can assess it then. But we are betting on the future with this deal. At the same time, the rate is reasonable for Pandora. We want Pandora to survive and thrive. The more people in the [digital] area, the better it is for all of us." (source)

Will the other majors seek direct deals? If so, what rates will they set? Will Pandora succeed in reducing the statutory sound recording rate, or will the RIAA uphold these rates, and then some (read here)? What will come of Pandora's rate court suit against ASCAP (read here)? The Sony/ATV deal is only for 1 year, giving them the flexibility to react to the outcome of these events quickly. If sound recording rates are reduced, they can really turn up the heat on the DSPs. If not, they may need to get more creative. Ultimately, rights holders should want Pandora, and others like them, to succeed. They need effective distribution methods for their music, so they can't squeeze the DSPs too much. But artists and songwriters deserve to make a fair living too, and shouldn't suffer by the hand of politics or disproportionate market power. What's most important is finding that balance - between songwriters, publishers, artists, labels, majors, indies, PROs and DSPs. A well-balanced environment where everyone is able to thrive behooves us all.

*It's also interesting to note that in 2010, the court upheld a decision to allow the background music service provider DMX to exercise its right to an AFB license. The first publishing company to license direct to DMX, setting off the chain of events that led to this decision? Sony/ATV.

Monday, December 3, 2012

You Can't Just Fingerprint Money: Why A Carefully Considered Public Performance Tracking Strategy Is In Our Best Interest

There's nothing like a well-implemented technological innovation. Whether solving a problem or enhancing a process, when the creation is thought out in full and applied to the right situation the results can be astounding. Efficiency. Opportunity. Productivity. Equity. Transparency. Advancement. The benefits go on and on. And that, of course, is what drives society's continued investment in new technology.

But while the fruits of technology-done-right can be far reaching and plentiful, the shortcomings of half-baked creations can be equally detrimental (I'm looking at you, DRM from the immediate post-Napster era). When new technologies create new problems the benefits carry less weight, and at a certain point if it doesn't work well, it doesn't work at all.

This is the exact dilemma that sits at the heart of ASCAP, BMI and SESAC's strategy for using fingerprinting technology to track TV performances. The systems they currently employ to license the rights, identify usages, and distribute monies associated with the public performances of the works they represent are well established and proven. To put things in context, the three PROs together process hundreds of BILLIONS of performances and distribute close to $2 BILLION to songwriters, composers and publishers every year. The system clearly works. But that said, the PROs also acknowledge that there is still room for improvement and are carefully considering new technologies to aid in more accurate and transparent accounting.

Last month TuneSat, one of a handful of audio fingerprinting and usage detection companies servicing the television market, issued a press release that took aim at ASCAP and BMI's methods. Both ASCAP and BMI have so far refused to accept performance tracking data as collected by TuneSat, and TuneSat is spinning this to paint the PROs as entrenched, archaic institutions.

TuneSat states that "up to 80 percent of music on TV goes unreported or misreported" and that manual reporting is prone to error and manipulation. They believe that tracking through digital fingerprinting is the way of the future. Manual reporting, ultimately left in the hands of licensees, is prone to error. After all, we are only human. Likewise, it is prone to manipulation, as reported by the recent allegations against music supervisors and producers at CBS. But it's important to note that these are far and away the exceptions and not the rule. Before jumping to conclusions about ASCAP and BMI's refusal to accept TuneSat's data, it's important to look at both sides of the issue. Audio fingerprinting will be an important part of the PROs' strategies moving forward (a prospect we're very supportive of too), but only when the benefits are clear and inarguable. Unfortunately, the technology has yet to prove itself in this regard.

There are several considerations that must not be overlooked when considering how PROs employ audio fingerprinting technology. Many composers today rely on industry standard instrument and sound samples to create their compositions. With that in mind, it's not uncommon for a digital tracking service to mis-identify a composition based on a commonly used sample. In order to make the proper royalty distribution, these "false positive" IDs must be rectified, which can be a very costly and time-consuming process. In some cases, this reconciliation costs more than the value of the performance itself, which ultimately harms content owners instead of helping them.

But there's a larger issue here. A non-starter, if you will. As it stands now, digital tracking technology cannot identify the TYPE of performance (i.e. featured, background, underscore, commercial, promo, theme etc.). Since this usage type information is paramount in determining the value of the usage, additional work would again be needed to properly reconcile the IDs - making these systems unusable.

Like so many things, there are always several sides to an issue.  Ultimately, the PROs exist to serve their members, and every decision they make must be in their members' best interests. There are many potential benefits to a well implemented digital tracking service. The ability to analyze dirty audio, to instantly detect and report usages, and to quickly capture and post audio samples of every usage are all features with great potential. And make no mistake - we all want it to work. But the decisions that the PROs make regarding digital tracking services for television are not merely matters of adopting new technology. They have proven their willingness to do so in several other areas, including radio, promos and commercials. The decisions are matters of how well the technology works in serving their needs and their membership.