StubHub Backed Astroturf Posing as Fans Deceive GA Legislators in Attempt to Draft Bill That Would Cement StubHub’s Dominance in Ticket Resale.

Georgia’s music advocacy coalition GMP along with artists and independent venues have been raising the alarm about a draft bill in the Georgia State Legislature that would seemingly limit ticketing fees. In reality the language of the bill makes it clear that this is simply a Trojan horse bill that seems to limit artist fan clubs, indie venues and others to sell face value non-transferable tickets to fans.

Despite what Washington DC lobbyists posing as fans might claim, I can tell you that in my experience what music fans want is face value tickets directly purchased from venues and artists. Out of necessity these tickets must be non-transferable to keep them from being scooped up by shady organized groups apparently working in concert with StubHub and others who scalp or make a market for scalpers.

The biggest contributing factor to outrageous ticket prices is not the ticketing fees, but the StubHub markup. StubHub knows that artists and venues are sick of StubHub making it impossible for fans to buy tickets at face value, that’s why they have been going from state to state, getting legislators to pass laws that block venues, promoters and especially artists from selling non-transferable tickets. In the case of Georgia draft legislation mandates that resold tickets be sold only through a “licensed broker.”

You know, like StubHub. This is lawfare.

It is not widely understood, but those pre-sales of tickets at face value by artists directly to their fans are technically resales, because artists generally buy them upfront from the concert promoters. This extraordinarily cynical bill would essentially end this long standing part of the artist-fan social contract. It is simply designed to make the state of Georgia safe for StubHub’s exploitative free-riding business model.

So how did Georgia legislators find themselves in the business of making the world safe for StubHub? Well perhaps because they thought they were doing the bidding of a grassroots organization supposedly representing fans frustrated by high ticket prices. In particular a group called Fan Freedom. (www.fanfreedom.org) has been all over the capitol pretending to speak for fans.

And this group is not limiting its efforts to Georgia. We know of four states where this “grassroots organization representing fans” is simultaneously pushing similar bills. How does a grassroots organization simultaneously push bills in Washington, Florida, California, Maryland and Georgia?

Maybe it’s not a grassroots organization.

According to publicly available sources. Fan Freedom was launched by StubHub’s then owner eBay in 2011. The stated goal was to convince lawmakers that primary sellers like Live Nation and Ticketmaster should not be allowed to place limits on ticket transferability. The astroturf group partnered with the National Consumers League to mask ticket resellers’ objections to the anti-scalping measures as “consumer opposition.”

https://www.ebaymainstreet.com/pl/news-events/ebay-stubhub-celebrate-launch-fan-freedom-project https://www.ticketnews.com/2011/02/fan-freedom-project-launches-to-curtail-ticketmasters-restrictive-paperless-ticketing-system/ https://web.archive.org/web/20110808123624/http://www.fanfreedom.org/ https://www.nytimes.com/2011/07/21/business/media/scalping-battle-putting-fans-in-the-middle.html

Fan Freedom Project was initially managed by Jon Potter, a long-term political consultant who has been involved with other industry-funded astroturf efforts and founded the Digital Media Association, the trade association for Big Tech against artists and songwriters–which has been on the wrong side of every creator issue known to man or beast.

https://www.linkedin.com/in/jonpotterdc/

In 2019, the Tech Transparency Project reported that one group he was behind, the Connected Commerce Council (3C), was not the organic collection of small businesses it presented itself as, but effectively a front for his DiMA pals Google, Amazon, and Facebook.

https://www.techtransparencyproject.org/articles/big-techs-new-disguise https://www.politico.com/news/2022/03/30/connected-commerce-council-amazon-google-lobbying-00021801

Fan Freedom Project’s president since 2016 has been Chris VanDeHoef, the former the director of government relations for TicketNetwork who now runs a government relations firm called Penn Lincoln Strategies. Yet he is apparently running around the capitol intimating he represents “fans.”

https://www.pennlincoln.com/about-us/chris-vandehoef

In Georgia the “grassroots” Fan Freedom Project is paying big money to Cornerstone Government Affairs which is headed by Chris Carpenter who was legislative counsel to Gov Roy Barnes. I say big money because GA only requires noting of expenditures that exceed $10k and based on what they were paid by other clients its likely to be a lot more than 10k. Plus they have registered five lobbyists. Five lobbyists in a single state for a grassroots organization? That’s 1970s tobacco industry level of lobbying! And they are doing this in fives separate states simultaneously.

This year, Fan Freedom Project hired a firm called Johnson & Blanton to lobby on its behalf in Florida, where legislation was recently introduced that would require primary sellers to offer transferable tickets. While StubHub is also actively lobbying in Florida. It has retained the firm Metz, Husband & Daughton as lobbyists in Florida since 2021. This is not a grassroots operation, its industrial scale mega-corporate lobbying operation.

https://floridapolitics.com/archives/528216-lobbying-compensation-mid-major-firms-fared-well-during-first-quarter-2/ https://www.floridalobbyist.gov/LobbyistInformation/GetLobbyistPrincipal
https://www.flsenate.gov/Session/Bill/2022/1316
https://www.flsenate.gov/Session/Bill/2022/1316/BillText/Filed/PDF
https://www.flsenate.gov/Session/Bill/2022/969
https://www.flsenate.gov/Session/Bill/2022/969/BillText/Filed/PDF
2https://floridapolitics.com/archives/528216-lobbying-compensation-mid-major-firms-fared-well-during-first-quarter-2/ https://www.floridalobbyist.gov/LobbyistInformation/GetLobbyistPrincipal

Artist have no problem with The State of Georgia helping fans by limiting high ticket pries and add on fees. Further most artists would be willing to accept a compromise where they offer both transferrable and non-transferable tickets at different prices. If that’s really what consumers really want. Indeed other industries, like hotels, rental cars companies and airlines offer both refundable and non refundable tickets. There is some good legislation to be made here, but first we have to be clear, the way the bill is currently written it gives StubHub a free-ride on efforts and investments of Georgia artists, venues, promoters and fans.

Let’s fix this bill.

February 24, 2023February 25, 2023 by Dr. David C Lowery

HITPIECE NFT RIPOFF: What you need to know and what can you do about it.

By now you’ve probably heard of the website HitPiece.com and their outrageous scheme to mint “NFTs” of virtually every song and album in existence. If you have not I suggest you read a pair of excellent articles by Kristin Robinson at Billboard Pro. Here and here.

“Founded by serial entrepreneur Rory Felton and investor Jeff Burningham, Hitpiece’s intent was to create NFTs of “every song,” according to the company’s pitch deck. Using Spotify’s API to gather information on artists of all sizes – from developing acts to Beatles members – HitPiece uploaded listings of NFTs from musicians it had never spoken to or partnered with, stating these non-fungible tokens were “available for auction” or “live” auctions. According to HitPiece’s FAQ section, the NFTs were said to operate on HitChain, a private Ethereum side chain which does not provide proof of work.”

If you are not even sure what an NFT is think of it as a sort of cryptocurrency like Bitcoin. But there is only one unique token. And this token can be associated with another digital asset, like a digital drawing, photograph, song or tweet. The issue is anyone can do this. Whether they have the rights to the associated file or piece of intellectual property. And that’s exactly where the problem starts.

On Feb 1st my twitter feed began to fill with outraged artists reporting that a website HitPiece.com was offering “NFTs” of their songs. I went and checked and sure enough the website was offering NFTs of virtually every one of my songs and recordings. Now I hadn’t authorized anyone to make NFTs of my songs and recordings and offer them to the public. Nor had I licensed anyone to use my album artwork, trademark, name, likeness or image to use on any products and especially not NFTs. I checked with my former labels on the outside chance they had licensed something but as I suspected they had not. And indeed even recordings which I exclusively hold the rights were on HitPiece.com.

I dug around on the site to see if I could figure out what was going on. Here I found the above paragraph. “Each HitPiece NFT is a One for One NFT for each unique song sound recording.” That sounds like they had minted or intended to mint a NFT of each one of my songs/sound recordings. Without any sort of authorization.

I even found a live auction of one of our tracks. Curiously it is an unreleased/unlicensed live radio broadcast that recently showed up on Spotify. From this I could confirm what I suspected: HitPiece was “scraping” Spotify to auto generate NFTs for every song on the platform. In addition they were sucking in promo photos and album art.

It appeared as if there were hundreds if not thousands of similarly situated artists, as when I went back on social media every artist I follow was posting screenshots of HitPiece NFTs. All of the artists noted (often in profane terms) that they had not authorized HitPiece to offer NFTs to the public. It became a true twitter shitstorm. By the end even civilians on LinkedIn were getting into the act (see above.)

Late that evening the operators of the website, took the website down, or it crashed under the crush of traffic. They later put the website back up with the above note (minus the NFT offerings).

By Friday numerous artists had sent “cease and desist” letters, others were promising lawsuits and even the RIAA announced they were taking action on behalf of their artists. The RIAA letter asks HitPiece to preserve all relevant emails and documents, which is usually a prelude to legal action. And indeed the letter makes reference to a number of violations.

“…copyright infringement (17 U.S.C. § 101), trademark infringement (15 U.S.C. § 1114), federal unfair competition and false representation of affiliation (15 U.S.C. § 1125(a)), violations of state and common law rights of publicity, and unfair competition under applicable state law…”

The RIAA also asked HitPiece to permanently close their website and business.

So case closed let’s move on ,right? The big companies with the big lawyers are on the case. No one will ever try this again. Right?

I wouldn’t be so sure. Remember YouTube started out as (and still is) a massive infringer of copyrights. Sure they pay some royalties on some tracks, but at a rate 1/8 to 1/20th that of Apple Music. And now It’s just too big to do anything about it. Do we want the same thing to happen with something like NFTs? The audacity of HitPiece scam is that by promising to mint an NFT of every song they intended to corner the entire market for song NFTs. What if it had worked? We’d have no leverage. We’d be coming hat in hand to them begging for a few pennies like we do with YouTube.

No, the best thing to do is to make an example out of these folks. Bankrupt them. These are not poor hackers living in their parents’ basements. Two are former major label record executives and the other two are wealthy private equity executives (here and here). These folks have A LOT to lose. We should make it so no one ever does business with these folks again. And the best way to do this is not by banding together through the usual copyright class action (although we can do that too), the best way to make their lives miserable is to bury them under a blizzard of individual complaints. Who knows maybe you’ll find a state prosecutor that wants to charge them with a crime. (doesn’t this seem like a criminal fraud?).

Although there is likely a copyright claim if you have registered your artwork, copyright infringement must be adjudicated in federal court. Similarly with Trademark infringement. And over the last two decades congress and the courts have made life pretty easy for anyone infringing copyright and trademark via the internet. The deck is stacked against us. What we really want to do is rely on laws that we can pursue easily in our own states. The RIAA letter helpfully suggests a number of tactics at the state level.

I’m not an attorney and I certainly don’t know the laws in all 50 states, this is just one musician talking about the tactics I intend to investigate and pursue:

Fraud. By any common definition of the term, what HitPiece did was conduct a fraud. The website clearly misleads the public. I didn’t offer my songs up as an NFT for sale. Yet my picture and name is right there. They “palmed off” something as a genuine product that was not. Legally is this fraud? It sure feels like it but I’m not an expert. I intend to complain in person at the local state district attorney’s office.

Rights of publicity. Many states either have a law that recognizes a kind of property right in my own persona. Companies can’t make products or provide a service with my name, likeness or image. If your state doesn’t explicitly provide a statute, it’s likely a state court has recognized a “common law” right. I intend to mention this at the local state district attorney’s office cause it’s a key element of how HitPiece executed their apparent fraud. I may file a separate civil claim against them.

Implied Endorsement. My state may also have a specific law that doesn’t allow others to imply that I endorse their product. Again this is something I will mention at the local state attorney’s office as it’s key to their scheme. I may also file a separate civil claim against them.

Unfair Competition/Deceptive Practices: Most states have these laws. What’s more deceptive and unfair than using my own copyrights,trademarks, name image and likeness to sell a product I didn’t endorse. The principals at HitPiece knew they didn’t have licenses with me. Two had deep experience in the music business managing intellectual property rights They knew what they were doing. Talk to your local state district attorney about this as well.

If hundreds of artists did something similar in dozens of states, we could really make these folks lmiserable.

Now that ‘s just my take as an artist.

Here are some similar suggestions from real attorneys…

No DMCA: Federal: TM Infringement/Unfair Competition: Lanham Act §§ 32, 1114 43(a) 1125(a)
TM Dilution Act: §§ 43(c) or 1125(c)
Maybe ACPA: §§ 43(d), 1125(d)
Wire Fraud?
State: Consumer, right of publicity, state TM, auctioneers?
Is NFT a security?
DMCA: copyright (if agent) https://t.co/fFd1hLb0d7

— Editor Baker (@MusicTechPolicy) February 5, 2022

More on this later. This is still developing.

February 6, 2022February 7, 2022 by Dr. David C Lowery

Songwriters Alarmed Biden Admin Looking at Google/Amazon Attorney for Antitrust Chief

The Intercept is reporting that the Biden administration is considering appointing Renata Hesse as Assistant Attorney General for Antitrust. The potential appointment has raised eyebrows in the press since Hesse in private practice worked on antitrust cases on behalf of both Google and Amazon. Google is already under antitrust investigation and if Hesse were to become AAG she’d at the very least have to recuse herself. Is it even appropriate to appoint someone that deeply conflicted? Were there no other antitrust attorneys in Washington DC to take the job?

But it’s even worse than it first appears.

Talk to any songwriter even tangentially involved in public policy and the story is much more alarming. Hesse isn’t just any Google/Amazon attorney. Hesse has a terrible history with songwriters. Last go around when Hesse was acting AAG for Antitrust in the Obama administration she tried to promulgate a new rule for songwriters that would have greatly benefited Google as it faced a $1 billion dollar lawsuit from an organization that represented songwriters. It was never clear why the DOJ took this action. It didn’t seem to emerge from any of the DOJ staff attorneys or public comments from licensees. She alone seemed to have pushed the change. The rule was so poorly reasoned the DOJ eventually drew two lawsuits. The DOJ lost one case and dropped/settled the other before it could be decided by the courts. During the fiasco it was revealed that Hesse had purposely omitted from her official DOJ bio her private practice work for Google fending off state antitrust investigations. As a result many people including myself have speculated the entire episode only made sense if the rule change was purposely proposed to help Google. In other words it looked suspiciously like a case of high level corruption that should have been investigated. It never was.

Here are the details:

First, the two biggest songwriter organizations BMI and ASCAP have been under “temporary” DOJ consent decrees since the early 1950s. Because of this songwriter public performance licensing and royalty rates are under the control of the DOJ. A single federal judge essentially sets the rates and terms for BMI songwriters and another judge for ASCAP. (Crazy right?) In the last 20 years digital broadcasters have become adept at exploiting this process to lower public performance royalties paid to songwriters.

As a result some songwriters have left these organizations and joined smaller organizations like Global Music Rights, because they are not under DOJ control and it is sometimes possible to get better royalty rates.

In 2014 Global Music Rights (GMR), alleged YouTube did not have the performance rights to about 20,000 works by artist GMR represents. These artists included some of the biggest artists in the business like the Eagles, Pharrell Williams and John Lennon. When Google refused to take down the works a lawyer representing GMR told the Hollywood Reporter that if Google doesn’t blink, “there will be a billion-dollar copyright infringement lawsuit filed.”

Not long after this happened the DOJ Antitrust section III (out of the blue) proposed a new rule for BMI and ASCAP. So called “100% licensing.” The rule basically said, if BMI or ASCAP controlled any portion of a song they could be forced to license the full 100% of the song. Not sure how the DOJ can force someone to licenses someone else share of a song, but I’m not a lawyer. Why does this matter? If you weren’t aware most hit pop songs are written by teams of songwriters and thus ownership is often shared by many writers. Professional songwriters typically enter into private contracts (co-administration agreements) with each other stipulating that they each administer and license their own shares of a song (fractional licensing). So if a movie studio wants to use a song, each of the writers must sign off on the contract. The DOJ proposal, 100% licensing, was odd. It went against longstanding industry practice. Further the DOJ antitrust section itself required this sort of fractional licensing in many of the contracts it supervised.

Songwriters and songwriter organizations were thus stunned by this development. At least until they realized that this was clearly helpful to Google in its dispute with GMR and thus made sense in a crony capitalist sort of way. Why? Well it is highly likely that many of those 20k tracks at the center of the GMR lawsuit were co-written with BMI and ASCAP writers (BMI and ASCAP writers/co-writers some weeks represent more than 90% of music streams). Thus by forcing the BMI and ASCAP cowriters to license songs on behalf of the GMR co-writers, the DOJ would effectively take hundreds of millions of dollars in statutory damages out of this lawsuit.

That is when attention began to focus on Renata Hesse. As Chris Castle at Music Tech Policy noted at the time:

“Ms. Hesse appears to be the thought leader behind imposing 100% licensing on the songwriter community. I arrive at this conclusion by process of elimination, as the DOJ professional staff do not appear to be taking credit for coming up with it on their own. Ms. Hesse is the one who has authority over the process, at least most directly, so if the DOJ professional staff did not originate the idea, and if no one in the voluminous consent decree public comments came up with it, it must have come down from on high. At least within the DOJ or even higher.

However, it is worth noting that the ASCAP/BMI consent decree review started before Hesse took over as head of the Antitrust Division from Bill Baer.

I doubt that Ms. Hesse came up with this all on her own, so I asked myself how did this person end up being in the position she is currently in with the authority to do so much damage to so many people who don’t deserve it. Not to mention the fact that when it comes to anything that the Google network touches, which is pretty much everything in human experience, the U.S. Government–at least currently and unlike their European counterparts–only seems to be interested in enforcing the antitrust law to protect Google, not to challenge it.“

Up until this point no one had noticed that Hesse seemed to have manipulated her official bio to omit the fact that during her last stint in private practice she had worked mostly as outside counsel to Google to head off numerous antitrust actions and investigations at the state and federal level. Other juicy details emerged. It was revealed in Texas Hesse worked hand in hand with Ted Cruz to lobby the state government on Google’s behalf. That is quite a thing to leave out of your bio. Especially in the antitrust division. Hesse for some reason knew she had to downplay this. Why?

Meanwhile songwriters (and privately many licensees that were not Google) began to loudly complain how disruptive this new rule would be to the entire music licensing ecosystem. For one, songwriters were quick to inform the DOJ that much of their repertoire was subject to private co-administration contracts, and the rule would require them to violate those contracts. The response from Hesse’s antitrust division was stunning. They instructed songwriters to renegotiate private contracts or remove the songs from the repertoire of BMI and ASCAP to comply with the new rules.

The consent decrees that the DOJ imposed on songwriters are ridiculous and need to go away. However there is one good argument for them as they provide a great degree of market efficiency. The consent decrees force BMI, ASCAP, to license their songwriters entire repertoire. This in turn influences the other two songwriter organizations to license their entire repertoire as well. These are called “blanket licenses.” Thus a radio station need only obtain four licenses to enable it to freely play any song. But removing thousands if not millions of songs from the BMI and ASCAP blanket licenses would require a radio station to enter into thousands if not millions of contracts to have the same freedom to play whatever they want. This change would completely undermine the entire rationale for the DOJ to regulate music licensing in the first place. Almost everyone involved on the songwriter side (as well as many licensees) became convinced this rule change was designed to help Google. This is stunning corruption. The entire DOJ antitrust division was being used to benefit a single company. A company that one could argue is/was involved in anti-competitive monopoly.

Around this time BMI and then Songwriters of North America (SONA) a songwriter advocacy group sued the DOJ. Essentially the lawsuits argued the federal government was forcing songwriters to violate private contracts or retroactively make previously legal activity illegal. (Ex post facto lawmaking is prohibited by the constitution.) Instead of backing down Hesse’s antitrust division responded with a new and dangerously unhinged claim: The consent decrees always required 100 percent licensing so songwriter fractional licensing contracts between songwriters were always illegal. This despite the fact the consent decrees never required 100 percent licensing and in case after case BMI and ASCAP were required by DOJ to license fractionally. But most embarrassingly as we noted at the time:

“If 100% licensing already existed why did the DOJ spend the last year asking for comments from songwriters, publishers and music services on whether to make this change or not?

It was a clown show. At this point several members of congress began to poke around in the matter. One congressman asked a different federal agency, The Copyright Office to weigh in on the matter. This was precisely because Hesse had wrecked the reputation of the entire antitrust division of the DOJ. And it smelled like corruption.

Eventually Hesse left the antitrust division, but she didn’t settle the cases before she left. She left the cases to drag on. I suspect out of spite. How many millions of dollars did these cases cost taxpayers and songwriters? I’ve always thought Hesse should have been investigated, if not for corruption then at least for incompetence.

It will be a very sad day if Biden appoints Hesse to oversee the antitrust division. 80 million Americans didn’t vote for Biden because he promised to put a Google attorney in charge of Antitrust at DOJ.

January 18, 2021January 18, 2021 by Dr. David C Lowery

As COVID Decimates State Revenues Tennessee Franchise Tax Comes for out of State Performers

Most people do not realize this, touring bands end up paying income taxes in multiple states. It tends to be the high population states in the West and Northeast. Think California and New York. This makes sense in some ways as the income tax is based on revenue you make in these states. Big states big revenue. It’s a pain to file multiple state returns but at least there is a reasonable rationale.

A franchise tax is different and is not usually based on a businesses income. It is essentially a flat fee tax on the corporate or LLC entity doing business in that state. The idea is that a business based in that state should pay for the services the state provides. These franchise taxes generally have minimum fees between $150-$800. Bands that use a corporate or LLC structure pay these taxes in their home state because they have a “nexus” in that state. A nexus generally means you have some regular place of business in that state. However some states try to apply the franchise tax even when an out of state business or band has no nexus in that state. However it is exceedingly rare. At least until recently…

Over the last couple months I’ve been hearing anecdotal stories about bands suddenly getting tax bills from the State of Tennessee. Odd. The music state? Aggressively taxing musicians? I didn’t think much of this as, it’s pretty common for bands to not realize they owe sales or income tax in states in which they perform frequently.

But last week I received a surprising notice from the State of Tennessee. A retroactive assessment for 7 years of Tennessee franchise tax. As far as I can tell we have no nexus in that state. I have not heard back from the Tennessee Department of Revenue, but apparently the State of Tennessee considers us to be subject to their franchise tax (now?) because we played a single show in the state in each of these years. Wow. This is ridiculous. Imagine if every state you played in required you to file taxes and pay $150-500 in franchise taxes for the privilege of playing a single show in the state?

Further, this retroactive assessment (including penalties and interest) comes at a time when most states are facing tax revenue shortfalls. When states and local governments face revenue shortfalls they have a bad habit of enacting dubious “revenue enhancement” schemes. Often these amount to badgering businesses and taxpayers into paying taxes and fees they would not normally be assessed. I have no evidence this is what is happening here, but something has changed with way my band is being treated by Tennessee tax authorities. And it is apparently happening to other bands.

WTF? I won’t be rushing back to Tennessee to play shows, record albums or even co-write songs until I have some clarity on the tax situation. I suggest other bands also exercise caution.

One last thought: The federal Music Licensing Collective will come online next year. The MLC is based in Tennessee. Does this mean every songwriter and publisher will now have to pay the Tennessee Franchise Tax? Hardly seems fair but it’s possible.

November 22, 2020November 21, 2020 by Dr. David C Lowery

Open Letter to Jeff Bezos from Trixi the Three Legged Rescue Dog

Todays guest opinion is by Trixi a 5 year old female Pit Bull/American Bulldog mix and cancer survivor.

Hi Jeff

You don’t know who I am, but I’m pretty familiar with who you are.  You are the guy that sends those men and women up onto my front porch. This happens nearly every day. I’m not sure what it is I ever did to you but it is quite annoying. The newspapers that line the floor around the cat’s litter box (yes, I know I have a problem) also tell me you are the richest man in the world with a net worth of 188 billion dollars. I understand that your company has benefitted enormously from the current pandemic.  Those same newspapers report you and your fellow tech titans Zuckerberg and Musk have seen your net worth rise $115 billion just this year.  It is a good year to be a tech titan.

In contrast to that the family I live with is largely supported by money earned from performing music.  Concert musicians and concert promotion is the family business.  Since mid march there has been no concert income for my family. In fact our family income has fallen 80%.  Fortunately for me and my family we still receive songwriting royalties from streaming and sales. These royalties are from songs my dog dad wrote over the last 40 years.  My understanding is my family uses these royalties as a kind of rainy day fund that helps us get through tough times and the dry periods between albums and tours.

To be clear I’m not whinging here. I have it pretty good for a dog. I spent much of my first few years in kennels having puppies. I know how fortunate I was to be adopted by my family.  But back in the spring I developed a dull pain in my left front shoulder.  At first I thought it was a muscle injury from trying to scoot under the couch to get what I thought was an old dried up bit of bacon. Long story it wasn’t. It was pretty good. But it wasn’t bacon. Anyway,  the pain rapidly worsened until I couldn’t eat or even drink water.  I tried to crawl under the house to die. It was that bad.  The vet told us I had a malignant bone tumor.  I would need my left front leg amputated at the shoulder and a few rounds of chemo.  Fortunately the surgery and chemo appear to have been successful. Knock on wood.  It took me about a week to figure out how to walk. Now I get around pretty good. Here’s a little secret dogs: It’s easier to run than walk with three legs.

The point is without those songwriter royalties I don’t know if my family would have had the cash to pay for that surgery and treatment.  Well maybe that’s not quite true as I’m certain my family would have done anything they could to save me.  Put the surgery on credit cards or even taken out a loan.  But you get my point.  My life is an expense that many music families might not be able to afford.

Now the other day I was in the recycling bin checking to see if all the cans were properly washed out and I came across the full docket for the United States Court of Appeals Washington DC Case No. 19-1028.  Fascinating.  Basically you, Jeff Bezos, the richest man in the world sued the Copyright Royalty Board to “recalculate” songwriter royalties retroactively 2018-2022. And you won! Now the trade organization that represents you is claiming this is simply a technical detail. But that is not true. it is clear from the actual court filings that you (and your buddies Spotify and Google) want to retroactively reduce songwriter royalties from the current 13.3% downward to around 10.4%.  That is, a retroactive 28% pay cut to my family. There is a very real possibility of negative songwriter royalty checks in late 2020 or early 2021.  This is during a worldwide financial crisis. When my family has already lost 80% of their income.

So I just have one question for you Jeff.

“How much more fucking money do you need?  What kind of asshole sues to retroactively take pay from songwriters during a pandemic?”

Okay that’s two questions. I’m a dog. I’m not good at math.  I am good at empathy.  You should learn.

You can read the court opinion at link below.

2020-08-11 Case No. 19-1028 GJ v LOC UNSEALED OPINION FINAL

August 16, 2020August 16, 2020 by Dr. David C Lowery

My Complaint to FTC Over Spotify False Claims They Weren’t Suing to Lower Songwriter Royalties

Spotify is completely full of shit (as usual). Spotify for Artists webpage the day after they argued in federal court to lower songwriter royalty rates.

Spotify’s claim that they are not suing to lower songwriter royalty rates appears to be a form of False Advertising, that may give them a competitive advantage over competitors.  For this reason I filed a complaint with the FTC.  Below.

On March 11th 2020 Spotify through its Spotify for Artists webpage made false claims about the nature of its appeal of songwriter royalty rates. (https://artists.spotify.com/blog/you-might-have-heard-about-the-streaming-industry%27s-crb-appeal-here%27s-what ). They also made these claims in a circulated press release on or around March 11th 2020. Specifically, they imply they were not trying to lower songwriter rates. The United States Court of Appeals For the District of Columbia ruling on their appeal (USCA Case #19-1028 Document #1856124 Filed:08/11/2020 Argued 10th of March) clearly indicates this is not the case. Further, Spotify apparently manufactured out of whole cloth the story that their appeal was centered on a technical matter of “bundling” lyric and video rights. On the webpage cited Spotify says “A key area of focus in our appeal will be the fact that the CRB’s decision makes it very difficult for music services to offer ‘bundles’ of music and non-music offerings.” The Appeals Court ruling nor the rest of the docket appear to support this contention. It appears the intention of this statement was to create the false impression that the goal of the appeal was not to lower songwriter rates, thus making consumers think Spotify was not taking a hard line towards songwriter pay. Consumers may have been misled and purchased Spotify subscription over competitors (like Apple) because they thought Spotify was not deeply hostile to pay raise for songwriters (Apple did not appeal songwriter royalties.) Finally, Spotify argued complaint March 10th 2020. The company had to know the March 11th statement was false.

If you want to file your own complaint go here

https://www.ftccomplaintassistant.gov/GettingStarted?NextQID=409&Url=%23%26panel1-9&SubCategoryID=17#crnt

Just use the “other complaint” form.  Let them sort it out.

Use this address for Spotify.

Spotify USA Inc.
4 World Trade Center, 150 Greenwich Street, 62nd Floor, New York, NY 10007
USA

I would use Horacio Gutierrez Head of Global Affairs & Chief Legal Officer at Spotify as the contact responsible for the false claim on FTC form.

August 12, 2020August 12, 2020 by Dr. David C Lowery

United States Court of Appeals DC ruling on Mechanical Royalties Unsealed

Here is the ruling. Unsealed.  I just read it and I’ll tell you this, although it is a technical ruling in many ways, it clearly goes against songwriters.  There is little chance this will not lower your royalty rates in the subsequent rehearing.

First, The Court of Appeals all but directs the CRB to put the cap back on “total content costs.” This clearly will have a depressive effect on the alternate mechanical royalty calculation.  Second, the court seems to be fundamentally uncomfortable with the fact that songwriters get a (phased in over 5 years) 40% raise. Like everyone involved in the proceedings so far, no one seems to understand the initial rate was arbitrary. It was picked out of thin air when no one knew what streaming meant.  Finally it’s totally depressing to see a federal court reiterate the notion that the federal government can not put a streaming service out of business by raising songwriter rates too high.  It’s not the governments job to save companies that have bad business models.  If the streaming services can’t pay fair rates to songwriters perhaps they should charge their customers more, not pay songwriters less.  Why do the federal courts think songwriters have to subsidize the streaming business?  All in all a depressing read.  The system is broken.  Songwriters who every day add value to the GDP of this country are robbed and brutalized by their own government. A distant unaccountable unelected elite that has no concept of our lives.  Meanwhile they make Daniel Ek billions of dollars richer every year.  Does that seem right to you?

 

2020-08-11 Case No. 19-1028 GJ v LOC UNSEALED OPINION FINAL

August 11, 2020August 11, 2020 by Dr. David C Lowery

Not the Onion: Spotify Claims it is Suing to Raise Songwriter Royalty Rates

 

Look! It says so in this blog post! Spotify says it is “supportive” of the 15% effective royalty rate to songwriters but it just wants you to throw in  a bunch of other rights for which you are already paid a separate fee.  See? That’s cool right?  That’s not a pay cut.  The appeal of the Copyright Royalty Board rate-setting is actually done to help songwriters!

I mean you can kind of sort of maybe say they are reducing your pay because yes that separate income you get from micro sync and lyric display will be deducted from the 15% effective rate.  But no they aren’t trying to lower your mechanical royalty rate, they are just trying to take away other streams of revenue that you already have.  I suppose you can say technically they are slashing your pay. While technically correct that would be silly!

I know it’s a little confusing cause by law the Copyright Royalty Board was charged with only setting the streaming mechanical  rate in this proceeding. But hey, these are extraordinary times, its okay if the CRB just goes ahead without any constitutional authority and effectively ex-post facto eliminates royalties paid under a different private contract. Sure that’s technically unconstitutional and administrative judges don’t enjoy the same immunity from liability that other judges enjoy, but yeah why not?   In times of extraordinary hardship, if streaming services have to wield the awesome power of the federal government to hurt the little guy, so be it. I mean you have to starve a few million peasants to make a crony capitalist omelette right?   What’s a 20-30% pay cut to help a billionaires get by?

 

August 11, 2020August 11, 2020 by Dr. David C Lowery

Negative Royalty Checks: Streaming Service Appeal Makes it Real Possibility

Billboard has reported that streaming services have won their appeal to force the Copyright Royalty Board to recalculate songwriter streaming royalties for 2018-2022. Yes, that means retroactively calculate 2 1/2 years of royalties.  This could easily lead to songwriters getting reduced or negative royalty checks.

Here is how:

In 2017 the royalty rate per stream for songwriters was calculated by dividing 10.4% of gross streaming service revenue by the total number of streams.  In 2020 it is calculated using 13.3% of gross streaming service revenue by the total number of streams.  If streaming services like YouTube and Spotify get their way that 13.3% will be reduced dramatically.  Let’s say streaming services manage to get the Copyright Royalty Board judges to reduce it retroactively to 10.4%.  Spotify and  YouTube would back out the overpayment from songwriters future royalty checks.  Remember Spotify has already done this once when they claimed they overpaid on family subscriptions.

Example: suppose you earned exactly $1000 per quarter over the last 2 1/2 years, or $10,000.  Streaming services could contend that they “overpaid” you 28% each quarter.  They would be within their rights to back out $2,800 from your next checks.  Negative royalty checks. Expect that in late 2020 or early 2021 just when your BMI royalties will shrink from the pandemic induced collapse in local advertising.

Now various industry and trade operatives are trying to spin this ruling as just a technical setback. That the Copyright Royalty Board used a flawed process to calculate songwriter royalty rates. The recalculation is no big deal. They would have you believe that streaming services spent millions of dollars on a federal appeal to get the same rate, to pay songwriters the same amount of money.  Does that make any sense to you?  Do not be fooled by this exercise in covering their ass.  It is unlikely that songwriters rates will remain the same.   The purpose of the exercise is to get lower rates and these lower rates will come retroactively out of your checks.

You have to wonder what kind of people work at these streaming services.  What kind of person is fully on board with a corporate policy to claw back pay from workers, when those workers have already lost most of their live music income.  I urge anyone that knows employees of these three companies (Google, Amazon and Spotify) to publicly out/shame these individuals. Force them to denounce their companies regressive and inhuman policies. Shun them from polite society.  Further any artists still cooperating with the digital services like Spotify, Amazon and YouTube should be regarded as strikebreakers and scabs. These artists should be treated accordingly.  Artists should pull new releases from streaming services that are pursuing this policy.

This is war.

August 11, 2020August 11, 2020 by Dr. David C Lowery

Good data in Garbage Out: The MLC/HFA Data Disaster

 

As many of you already know the new federal Music Licensing Collective has selected Harry Fox Agency as the vendor to provide song data to the MLC. It is rapidly becoming clear that what this really means is that the MLC will start with the HFA song database and then through a rather convoluted and manual process, songwriters will be required to “ensure the quality of that data” if they expect to get paid. In other words songwriters will do all the heavy lifting.

I’m a little confused here.  The MLC received $37 million dollars in startup costs from digital music services.  Clearly an accurate database is necessary to start up an entity designed to distribute song royalties.  So it should be a start up cost, not an after thought outsourced to songwriters. Especially after we songwriters were told over and over again that the streaming services would pay for MLC.

As an aside,  we will never know much about what the MLC spends its money on  because the whole fucking budget of the MLC has been redacted on the copyright office website.  This is not a joke.  How is this even legal?  Why the fuck is the budget secret from the songwriters/public it’s supposed to serve? You think the so-called songwriter groups represented on the various boards of the MLC would be the least bit embarrassed by this.  Apparently they aren’t.

Figure 1.  MLC filing on Copyright Office website.  The entire budget is redacted in the public record. 

But I digress. That’s another blog. The much bigger problem is the MLC is apparently building the database around the existing HFA database.  You know the database that got Spotify and Rhapsody sued.  This will be the MLC database. Garbage in Garbage out. This will be an unmitigated disaster.  Let me show you:

In 2019 I chose HFA to administer the mechanicals on the self-published part of my catalog.   When my team first contacted HFA they were told HFA had information for around 80 of my songs already.  Unfortunately the data was wrong.  It showed me as 100% writer on many songs that were co-written and co-published. Interesting cause at that point I’d  never been paid by HFA. And I am not sure where this information came from as at that point I had never given any splits to HFA.  I suspect ass covering because the Spotify/Rhapsody lawsuits involved this part of my catalog (HFA was vendor hired by Spotify to clear songwriter licenses and pay songwriters. They failed and the lawsuits were the result.)

Regardless my team proceeded to update the data and provided the proper splits and co-publishers to HFA.   And this is where it gets weird. We received this email from HFA.  Here is a snippet.

“For updating songs it is most efficient to process them manually, by entering specific song codes in the “Add/Update Song” section of the eSong tool. Additionally, you cannot relinquish or decrease your splits on songs in our system, as this requires an agent to do it on your behalf. I say this because it appears you have a 100% split on nearly all songs in your catalog. (Emphasis added.)

The wording is a little unclear.  But I thought that this meant I could “decrease” my share on specific songs, and have the co-writers co-publishers attributed if I went through the manual process.  So we sent a list with updated songs splits,ISWC (unique international identifier for a composition) and IPI numbers (unique international identifier for a songwriter or publisher).

I didn’t think any more of this until I had my team build a CWR file.  CWR is the most widely used international data format for song information (The MLC is not using this format for some reason).  When we created the CWR file we discovered that the HFA publisher data still did not match. Not only that it seemed to be missing important data (ISWC, IPI and ISRC) that we had provided.

Here is an example song:

Our Data (submitted in 2019 based on BMI records):

 

Resulting HFA data (2020 public facing database):

First thing we notice is that HFA is reporting that I am not an HFA registered publisher. WTF? Second problem is that Trent Summar’s publishing share (Farm Rock Music) is not listed. This has instead been assigned to “copyright control.”  It is unclear what that means. It is clear that since this song was previously mis-registered as David Lowery/Bicycle Spanaird 100%, HFA records have been updated. The co-writer has been added, but not the co-publisher. But curiously they somehow have Trent’s middle name. Now I thought perhaps this was just a deficiency in the public facing database.  So I double checked by looking up the song from my own HFA account.

Here is the (internal data) that search returned.

No IPI numbers? Well maybe those are hidden for privacy. But no ISWC number? And Farm Rock Music is still not listed as a publisher.  That is again listed as copyright control. This is really shoddy work. How is the MLC supposed to distribute royalties based on this data?

I checked an additional 25 co-written songs and the data was fucked on all of them: multiple song codes, incorrect splits, missing co-publisher information, missing ISWC codes, and some songs were just not in the HFA database.  Honestly it looks like someone never finished doing the job.

It’s possible that I or someone on my team somehow screwed this up, but it seems unlikely. I have copies of the HFA formatted excel sheets that were submitted and they are correct.  If all the self-published songwriters are in the same situation then we are likely talking about millions of songs that have bad data. This is very troubling.

“But my BMI Data is Correct.  Why Didn’t MLC Start With That Data?”

Really odd, right? The data the MLC is seeking already exists in a machine readable format at the PROs (BMI, ASCAP, SESAC etc).  Why is it that songwriters can’t simply opt in to have their data transmitted to the MLC? Wouldn’t this be the easiest way to correct the MLC database?  Instead songwriters are going to have to go through and get HFA to manually update each song.  For an average songwriter like myself, even at minimum wage that’s probably several hundred dollars worth of work. And my data is pretty organized!

The sad thing is we were told over and over again that streaming services were supposed to pay for costs of the MLC.  Why are songwriters being asked to do all this unnecessary work? Even the MLC’s official title they’ve given to the effort make songwriters clean up their mess is insulting: “Play Your Part™.”  They thought it so clever apparently they have trademarked the phrase.

The US Copyright Office should step in and look at whats happening with the MLC database.  Something is very wrong with the HFA data.

 

 

 

 

 

 

August 10, 2020August 9, 2020 by Dr. David C Lowery