ASCAP, BMI Demanding Payment For 30 Second Previews At Web Stores

from the are-they-insane? dept

It's been really stunning to see just how little dignity groups like ASCAP and BMI have in trying to suck every last penny out of any kind of musical usage, without ever once considering the damage they're actually doing to songwriters. It's as if the folks who run these groups have no concept of the actual impact of their crazy demands. In just the last few months, we've seen them try to squeeze more money out of music video games -- apparently not comprehending how much those games help promote musicians and sell more product. Then there was the fancy trick, where they claimed that websites that embedded music videos from YouTube had to pay even though they were already getting paid by YouTube directly. They just wanted to get paid twice. And remember back in the summer when they claimed that the ringtone playing on your phone required a public performance license on top of the royalties already paid? They have no shame.

So, I guess it should come as no surprise at all to find out that their latest target is the 30 second previews that you hear on iTunes or Amazon.com. Yes, they're claiming that those 30 second previews should count as a public performance, and they want to get paid. Now. And they're asking Congress to make it happen -- because, as we've been learning recently, if you're inept at running an actual business, just go to the federal gov't and ask them to bail you out.

Rick Carnes, the head of the Songwriters Guild of America -- and who, we've been reliably informed, is a big fan of this site (that's sarcasm) after our previous articles debunking some of his more absurd claims -- explains the situation:

"Yesterday, I received a check for 2 cents. I'm not kidding. People think we're making a fortune off the Web, but it's a tiny amount. We need multiple revenue streams or this isn't going to work."

Talk about entitlement culture. Because Rick Carnes is unable to structure a smart business model, and thus makes pennies, everyone else needs to just cough up and pay? Yeah... that's reasonable. How about rather than trying to squeeze every penny out of everyone else (and then funnel it to the top artists instead of the smaller artists, anyway), you spend some time actually understanding basic business models -- such as ones where you convince someone that something's worth paying for, rather than just demanding Congress give you a cut of everything, in a way that harms the very musicians you claim to represent?

And, of course, as the article above notes, it's a flat-out lie that songwriters aren't getting paid for a lot of this stuff:

"These guys are afraid that the business model is shifting away from public performances to a model of private performances," [David] Potter [from the Digital Media Association (DiMA)] said. "This is a turf battle. They are saying, 'The songwriters aren't getting paid.' Baloney. Songwriters are getting paid. They're paid sync rights and (mechanical) rights. They aren't getting paid for the public performance in a download because there is no public performance in a download."

This is a pure money grab by people who don't want to come up with a business model demanding free cash from those who did come up with a better business model. They're blaming everyone else for their own unwillingness to adapt.

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Songwriters Guild Boss Claims Songwriters Can't Write Without Copyright

from the oh-really-now? dept

Last week, we wrote about a rather level-headed and quite interesting FT opinion piece written by The Pirate Party's Christian Engstrom, who now represents the Swedish Pirate Party in the European Parliament. While the entertainment industry has tried to paint the Pirate Party as a bunch of thieves who just want stuff for free, Engstrom's piece was quite sensible in explaining the real thinking behind the party: a focus on individual rights and worries about privacy invasion. Of course, the usual copyright supporters couldn't let such thinking go unchallenged...

Rick Carnes, the head of the Songwriters Guild of America wrote a letter to the Financial Times, responding to Engstrom, but the letter is odd, poorly supported, flat-out wrong in some spots and seems to have totally ignored what Engstrom was actually saying. Let's take a look:

Christian Engstrom of the Pirates party is absolutely correct in his assumption that Elvis's music does not belong to him. It belongs to great songwriters like Otis Blackwell, who wrote so many of Elvis's big hits such as "All shook up" and "Return to sender", and who fought for years to protect and strengthen US copyright law. Without copyright, Mr Blackwell would never have been able to create that "common cultural heritage" that Mr Engstrom wants to think of as his own.

First, this is a near total misreading of what Engstrom said. You have to assume that Carnes -- by no means an unintelligent person -- is simply deliberately misstating Engstrom's claims to further his own protectionist positions. Engstrom's point is just in noting how odd it is that we can't share a key part of our common cultural heritage. If you look at pretty much all of human history up until recently, part of what made a common cultural heritage possible was the ability to share it. Engstrom wasn't claiming that it was his own as Carnes states, but that as part of our common cultural heritage it makes sense that we'd like to share it with others. That's how culture works.

But, more importantly, Carnes is flat out wrong in claiming that Mr. Blackwell would never have been able to create those works without copyright. The incentives may have been different, but as we've been showing time and time again, there are tons of alternative business models for the creation of music that do not rely on copyright. And, given the massive demand for musical entertainment, it's pretty clear that such business models would certainly allow for compensation of songwriters as well. This assumption that copyright is the only way to pay songwriters is just silly and ignorant. It's just not true and has never been true. For someone who positions himself as a creative person, to insist that there's only one mechanism for songwriters to earn money is simply unbelievable.

He forgets that it isn't technology that "opens up new possibilities" -- it is the people who create the technology, the very people who earn their livings from patents and copyrights.

No, actually, Engstrom is quite clear that he does not forget the people. He's quite focused on actually supporting their individual rights. What he's against is the abuse of their rights via overly encroaching government monopoly. Furthermore, Carnes is again wrong in claiming that these people "earn their livings from patents and copyrights." They do not. They earn their living by putting in place (or working for a company that has put in place) a workable business model that involves providing goods and services that people or companies want and pay for. They may use patents and copyright as a part of that, but it is false and misleading to claim they earn their money from the patents and copyrights. The patents and copyrights, by themselves, pay nothing. In fact, the only way to get money from such intellectual endeavors is to offer people something they want in order to generate money in a business model. No one is trying to take that away. We just think that it need not have the gov't setting up unnecessary and limiting barriers.

Computer code, songs, artwork and drug patents don't appear "as if by magic". These people invest their lives, their dreams, their money, their time and all their hopes for the future in their work.

Indeed. No one has suggested otherwise. But part of that investing of lives, dreams, money and time is making sure they put in place a reasonable business model.

Creative people don't necessarily create only for money, but the money is necessary if only for them to continue to create.

Again, this is a total strawman. Carnes is pretending that Engstrom said that creators shouldn't earn money. He did not. He was pointing out that how they earn money may change, but no one is saying they shouldn't earn money. That Carnes seems to think that copyright is the only way to make money from content is either willful ignorance or blatant lying by someone whose job it is to push for greater protectionism for his constituents.

The real "restriction" on Mr Engstrom's access to an Elvis song is a paltry 99 cents for a download on iTunes. For that he wants us to abandon the copyright and patent laws that have been constructed over hundreds of years.

Again, this is a total misreading of Engstrom's comments. Engstrom's complaint isn't with the 99 cents one needs to pay to download a tune (though, I don't believe they use American money in Sweden...), but with the fact that he should have to pay to share and promote such a cultural artifact with others. It is only with intellectual property that such a restriction is placed on it, and it is a massive limitation on how people interact through culture these days.

Nor is the world "at a crossroads", as he claims. We will not face the apocalypse if people have to pay for music again. What is already causing serious cultural damage is the failure to enforce copyright law on the internet. I started making my own music at eight years old and by 13 I was making money at it. By 27 I was a professional songwriter and built a lifelong career as an "active" creator of musical culture; until, that is, I was put out of business by illegal downloading.

Again, Carnes seems to have misunderstood and is misrepresenting what Engstrom said (I don't believe he reflected him accurately once in the entire letter, which is impressive). No one is saying we will face the apocalypse if people "have" to pay for music again. He's simply noting that it's impossible to stop what technology has allowed. There is no such thing as people having to pay for music again. No one has to pay for anything. They make decisions in the marketplace -- and many are choosing not to pay for music anymore.

Furthermore, while Carnes may sincerely believe that "illegal downloading" put him out of business, the only thing that really put him out of business was his apparent inability to adapt to the changing marketplace. There is absolutely nothing stopping him from writing any more songs, other than an apparent lack of creativity in adjusting to a changing marketplace.

Mr Engstrom warns that "society has to make a choice" between total anonymity or totalitarian control on the internet. This is naive. The right choice is neither. Instead, we need to find some sweet spot in between. It is simple to conflate the ideas of privacy and theft. I could, for instance, claim that it is my right to wear a ski mask into a bank in order to keep my identity "private" from the prying eye of the bank security camera. The security guards might take exception to that, and for good reason.

Must we really explain the difference between copying and theft yet again? Engstrom is not talking about theft. He's talking about the ability to share and to communicate through content.

Similarly, while governments should limit intrusion into people's private lives they also have the responsibility to protect citizens from the theft of their property.

Indeed. They do. But this is not about theft, and it's not about property.

Laws are passed based on history, common sense and hopefully the common good. The internet is a new medium and the world is still trying to come to grips with the balance between privacy and security. I would ask Mr Engstrom to give that a chance to happen by toning down the rhetoric.

This is the most amusing of all, seeing as Engstrom's piece was rather devoid of inflammatory rhetoric, but was amazingly reasonable and level-headed. And speaking of rhetoric, it was Carnes who recently did an amazingly inflammatory interview where he used all sorts of bogus rhetoric. In it, he referred to the internet as "cyber somalia." He claimed the days of the stand alone songwriter were "over." He claimed that those who are sharing and promoting music online are "a mob of anonymous looters." He said he was hoping for "a 'bail-out' for all the songwriters who lost their jobs because their intellectual property was not protected by the US Government on the Internet." He calls Google "a real culture-killer." He called anyone who suggested that perhaps songwriters should explore new business models in a changed market "unbelievably arrogant and self-serving."

So... if we're talking about "toning down the rhetoric" perhaps Carnes should start with himself? At the very least, he might want to take a step back and try responding to what Engstrom and others are actually saying, rather than this straw bogeyman he seems to have set up in his mind.

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Dispensing With Some Myths About The Poor Poor Songwriters Decimated By Piracy

from the cry-me-a-river-of-song... dept

Entertainment industry lawyer (and big time copyright supporter) Ben Sheffner has a blog post pointing us to a rather amusing "interview" between two other copyright maximalists: Chris Castle, another music industry lawyer, and Rick Carnes, the head of the Songwriters Guild of America. Sheffner, amusingly, absolutely loves to nitpick any news article or blog post from those who believe that copyright law is too strict -- ridiculing minor misstatements or weaving in questionable legal theories to mock those who question the abuse of copyright. Yet, in writing about this interview between two people who share his worldview, apparently all skepticism or critical thinking goes right out the window. So, I guess we'll have to do it for him.

Now, I almost hesitated, because Castle has this friendly and inviting header to his blog:

Copyright 2006-2008, Christian L. Castle. All rights reserved. NOT subject to Creative Commons deed, license, or whatever it's called this week by the self-serving shilling for the self-absorbed on the short con.

Yes, you see that anyone who recognizes how to benefit from the sharing and promotion of content is apparently a "self-serving shill for the self-absorbed" as opposed to someone with some basic knowledge about the economics of information and how to craft successful business models around it. Clearly, Mr. Castle would prefer that no one ever bother to help promote his blog, and I'm tempted to oblige and ignore him -- but there are some important points in his post that need to be discussed. And, despite his slightly threatening header, I'm going to bet that fair use covers the following clips for the purpose of commentary. If he disagrees, we can discuss it and, who knows, maybe this post will disappear (save it now!). Oh, and by the way, Mr. Castle, it's 2009 now. You might want to update the date on your notice (which, as a lawyer, I'm sure you know -- you don't actually need to retain your copyright).

So, off we go. He starts off ever so nicely, tearing down all "Internet analysts, self-appointed futurists as well as self-annointed consumer advocates," claiming they all "misunderstand the role of songwriters and the negative effects that rampant piracy has had on them." Way to totally demonize and pigeonhole anyone who speaks up with alternative business models. But clearly, Castle (and Carnes later) are not interested in alternative business models. They really, really like the way the world used to be, and they're going to keep on wishing that it could go back to that. Then there's this:

People who just write songs don't sell t-shirts, don't play shows, don't have all the other income streams available to them that the EFFluviati point to as subsititute revenues for the cruel theft of labor value by companies like Kazaa, Morpheus, Limewire and the Pirate Bay.

I like the "EFFluviati" coinage. So eloquent. But, of course, he uses it to brush off what he hasn't bothered to understand (amusingly, right after insisting that it was everyone else who doesn't understand). This is, unfortunately, all too common among some (though, I would say definitely not all) of the copyright system defenders. Rather than understanding the basic economic principles at play, and using those to understand how to craft new business models, they simply look at one or two business models being used by some (t-shirts! concerts!) and insist that's really all there is. It amuses me that folks who apparently claim to represent the "creative" industries are so uncreative themselves. It also amuses me that they insist that no one outside of the music industry can comment on music business models, but they have no problem commenting on economics without any experience in that subject.

If they bothered to take the time to actually understand the economics at play, they would recognize that there are always scarcities to be leveraged, and business models can be crafted around those scarcities. With song writers, of course, there's the scarcity of their time and their skill -- all of which can be monetized with smart business models. It's not that difficult to figure out how this works, if you look at a few other industries that employ "writers" and realize that songwriting can be compensated in much the same way.

Carnes and Castle jointly bemoan the fact that there are fewer professional songwriters these days, and it's just not like the old days anymore. They also take time to trash "amateur" songwriters as being not worth a dime. It's as if someone let Andrew Keen into the conversation. Carnes and Castle conveniently ignore that more music than ever before is being made today -- and, yes, a large percentage of that music is terrible, but there's a ton of excellent music mixed in. The real trick is just getting better filters. But, of course, rather than do that, Castle puts up this bogus experiment:

Lock yourself in a room for an hour with a continuous playback loop of "Chocolate Rain". Then try it with Gershwin, Cole Porter, Lennon-McCartney, Diane Warren, Carol King. See which you like better.

Right, pick a dreadful amateur song, and then pick wonderful (but all very old) professional musicians. Of course, Castle doesn't bother to note the obvious. I could pick some current indie songwriters, and suggest you spend an hour listening to... say... Corey Smith or Jonathan Coulton or occasional Techdirt author Blaise Alleyne or Techdirt reader and free culture success story Adam Singer or (my personal favorite) Vic Ruggiero (start with this song) or some other top indie songwriters... and then try it with NSync or New Kids On The Block or any other teenie bopper sensation from the past twenty years -- all using "professional" songwriters -- and see which you like better. See? The "point" is no point at all.

Then Carnes jumps in to blame all the troubles of songwriters on their unwillingness to recognize the way technology had changed the market, ignoring all sorts of new opportunities to make money... oh wait, no. He blames everything on those darn pirates, and the fact that things just "aren't the way they used to be." Yeah, and we all used to walk uphill both ways 10 miles there and back to school in the snow:

There are multiple causes for this situation but most of the damage was wrought by two specific problems. The first being that the internet has turned into a Cyber-Somalia.

Professional songwriters used to live on advances from their music publisher. These advances were to be recouped from record sales only ("mechanicals" is the industry term for these revenues). Music piracy killed record sales so that made it impossible for music publishers to recoup the advances they paid songwriters so they stopped signing writers and let go of the ones they had when their contracts ran out.

In other words, the market changed, and Carnes is screaming about how the world needs to stop and go back to the way it was. I guess Carnes wishes that we went back to an age when you picked up the telephone and had to speak to an operator. Eventually, phone technology reached a point where we could all make those connections ourselves, putting lots of phone operators out of work -- thanks to those darn "calling pirates" (but also enabling a communications and technology revolution). Oh wait, what am I talking about... the phone put all those old telegraph operators out of work, so it was probably evil too.

By the way, if you want a shorthand way to know of any business or industry that's in serious trouble, it's when you ask them what their main purpose or mission is, and they talk about "protecting" anything, rather than adding value and expanding the market. So, Carnes, what's your number one job at SGA?

The mission statement of the SGA is two words "Protect Songwriters". That lack of specificity has forced me to show up in all kinds of places I never thought I would be! I was the lead witness in the latest Copyright Rate Board hearing. I have testified on behalf of songwriters in both the Senate and the House of Representatives on many issues concerning song writers rights, and I have spent the last ten years flying all over the country talking to people about the harm that is being done to American music by the widespread theft of songs on the internet by a mob of anonymous looters.

Maybe, rather than than focusing on "protecting" them, you might want to look at enabling them to adapt and capture some of the massive new opportunities out there.

Then there's this rather interesting interpretation of the Constitutional clause that resulted in copyright (you know, the one that's "to promote the progress"). According to Carnes, it's not about promoting the progress, but about raising the standard of living of songwriters:

"At least the [Congressional] Members I have talked to understand that the Constitution includes provisions for royalties for creators because without them the quality of life suffers."

Interesting. Makes you wonder why Congress didn't mandate full protection for telegraph and phone operators when technologies changed how those professions worked as well. After all, I'm sure -- temporarily -- those workers saw their quality of life decline. But, of course, we all know that eventually, their quality of life improved greatly, thanks to all of the wonderful things enabled by those new technologies.

Then Carnes goes on to rip on basically everyone else for causing problems for songwriters -- never once recognizing that maybe the problem is that the rest of the world has moved on, while he and his group haven't even tried. He blames the record labels (well, we agree on that one), every internet service out there (not kidding: "I am not a fan of any particular online company since I have had to spend the last three years of my life fighting them...."), and, of course, Google: "I am not a fan of Google because I believe their search algorithm reduces all art to the lowest common denominator. That's a real culture-killer if I ever saw one."

Yup, hand this man one of the greatest tools for promoting, discovering and distributing new music for songwriters, and he hates it. It's a "culture-killer." Actually, what he really means is that it's a killer of legacy structures, and apparently he'd rather not recognize what it enables, but will complain about what it's taken away.

Carnes goes on to complain (again) about certain business models that don't work for songwriters (concerts, t-shirts), again apparently not creative enough to recognize the scarcities offered by songwriters, and then comes my favorite part:

The most infuriating thing about being lectured to by anti-copyright groups about how songwriters need to get a new 'business plan' is who gave them the right to tell us how to make a living? Who are they to say we shouldn't fight to defend our rights? In truth, I find their suggestions are unbelievably arrogant and self-serving.

This is a common complaint that we hear, and I'd like to address it head on, because it's 100% strawman, and it needs to be debunked and discarded. No one is telling them they "need" to get a new business plan. All we're doing is (a) explaining the changes in the economic and technological landscape and (b) explaining how that opens up new possibilities and (c) noting that if they choose (and it's their choice) not to adjust, they're going to be in trouble. The problem is that part (c) is happening, and rather than recognizing part (a) and (b) they're lashing out at those of us who tried to show them that there is a better way. If it's self-serving to show songwriters and musicians better ways to make a living and warning them that fundamental changes in the marketplace mean the old way can't survive, then so be it. But it's not, as Carnes and others (including Sheffner) seem to believe, an attempt to harm musicians. Songwriters don't need to change at all, but then they'll go out of business. The problem is that Carnes wants to blame everyone else -- including those who tried to suggest a better way. No good deed goes unpunished, of course.

I'm sure buggy whip makers were upset, as well, when people suggested they needed a new business model, but how many of us are really that upset about the diminished buggy whip industry these days?

Both Castle and Carnes take separate turns to suggest that anyone who's never put out a song shouldn't be allowed to comment on the matter at all -- which I'd argue could (again) easily be flipped around. Those who have never bothered to understand basic economics shouldn't be allowed to comment on business models either. Musicians are free to talk about music -- and I'd never try talking about what makes a great song, since that's not my area of expertise -- but it's somewhat ridiculous to claim that only musicians understand the economics that impact music creation. Besides -- as we've seen from our own Blaise Alleyne and Adam Singer -- there are plenty of real musicians who do, in fact, recognize the power of these issues.

And, finally, Carnes' big finale is quoting a totally unnamed "real economist" who claimed that "nothing competes with free." I could come up with a pretty long list of of examples showing musicians and songwriters who have, in point of fact, successfully competed with free and earned millions doing so. But, why let reality seep into a discussion when some unnamed "real economist" says it's impossible. But, if Carnes and Castle apparently only take lessons from real economists, rather than reality (which, of course, goes against what they said earlier in their discussion), I'd be more than willing to point them to various real economists who have shown how to compete with free -- including our most recent Nobel Prize winner.

So, of course, now that we have both real world examples and "real economists" showing how it works, I'm sure Carnes and Castle will admit that perhaps they were a little closed-minded? Or... maybe not. Cognitive dissonance will probably seep in and we'll hear about how economists don't know anything, but only real songwriters can comment on it. Well, okay, let's go back and look at the songwriters who, rather than whining and complaining about times gone by, actually bothered to understand basic economics and do something about it. How about Corey Smith, who not only figured out how to "compete with free" but figured out how to use free to make $4.2 million last year.

And then there's Trent Reznor. He figured out how to make $1.6 million in a single week for music he gave away under that "self-serving shilling for the self-absorbed on the short con" of a Creative Commons license. And, you know what? It didn't even involve t-shirts or concerts. But, you know, according to Carnes, Castle and Sheffner, that's impossible. And, we're all thieves or something. Now, Reznor and Smith are both performers as well as songwriters, but both employ a number of folks to help them do what they do (managers, tech guys, other musicians, etc.). If you're bringing in that much money "competing with free" I'd imagine spending some of it on songwriting help (for those who need it, of course) isn't that big a stretch, is it? Reality's a bitch, sometimes, ain't it?

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