Benom Plumb, Assistant Professor of Music Industry Studies at the University of Colorado Denver, reviews the biggest stories of the week affecting music royalties. He is a music industry professional, not an attorney.
Benom’s Take: This week’s big news of ASCAP and BMI joining forces to create a joint musical works database is a huge step in the right direction to clearing up confusing copyright claims, splits and licensing data. It should have really happened a decade ago, at least. However, due to the fierce competitive nature of the two biggest American performing rights organizations, this never came to fruition until now.
Why now? I’m of the opinion that the PRO’s may be anticipating losing their battle with the Department of Justice for the practice of “fractional licensing.” Quick review: The DOJ says that ASCAP/BMI should license 100% of a copyright, even if they only represent a fraction of the copyright. This flies in the face of the industry standard practice where each party is responsible for licensing only their “fraction” of the copyright.
It’s true that a joint works database is necessary regardless of the DOJ fight, but I think this crucial issue with the DOJ “lit a fire”--so to speak--under ASCAP/BMI to get moving before it’s too late. The database is expected to launch sometime in 2018, with a possibility of incorporating SESAC’s database at a later date. That would be great to cover all three PRO’s, but that still leaves a fourth PRO out of the mix--Global Music Rights. GMR’s database is in desperate need of updating and functionality too, so GMR should somehow get in on this given they represent hit artists and songs as well. Nevertheless, the ASCAP/BMI joint database would cover around 70% of the market, which is great progress.
Facebook Takes Another Step Towards The Music Biz With Source3 Buyout (Music Business Worldwide)
Benom’s Take: With recent acquisitions in technology to identify intellectual property on its platform and hiring music industry professionals to join the Facebook team, it seems apparent that Facebook is making big strides to take on YouTube in the area of user-generated content and videos. As the article states: “Facebook is gearing up to take on YouTube properly in both the user-generated and premium video space - while sliding up to established providers to embed itself deeper in audio streaming.” What this means in practicality is at least two-fold:
Facebook will be able to better track uses on it’s platform to pay rights owners.
Get ready for more family/friend videos with music in them to get ripped down from your Facebook page, claiming the copyrights were not cleared.
As mentioned in previous posts about Facebook, I have big privacy and fair use issues with #2. If someone posts a video with music in it, and the settings are set to private for your friends list only, I think fair use should apply (meaning no license or payment is necessary). On the other hand, if someone is posting a video on Facebook for public use in order to monetize the video, then that’s something else entirely. There has to be a balance on this user-generated content issue and I’m afraid the Facebook effort will be overkill for those of us that just want to share an experience with our family and friends. But for those who seek to use music and video to monetize online, it’s good progress to getting more royalties into the proper hands.
Benom’s Take: On Wednesday, a decision on the Quincy Jones lawsuit against the Michael Jackson estate was reached over an alleged $30 million in royalty underpayments. As mentioned in a previous post on the case, I wrote that most of the time, folks get underpaid royalties, especially if the artist or record company has been audited. The jury concluded this was the case, although about $21 million short of what Mr. Jones was suing for.
The article states that the Michael Jackson estate had already conceded that Jones was underpaid less than $400,000 in royalties due to accounting errors (that’s a lot of errors, by the way). I guess $9.4 million is a good happy medium between $400,000 and $30 million? Either way, like I tell my students and clients all the time… “This is the music business, you will be underpaid. So be ready to audit and fight for your money.”
Benom’s Take: Yes, Google owned two competing music services--YouTube Red and Google Play. Now the two will be merged into one service, competing not only with Spotify, but YouTube own “free” platform. Unless Spotify completely crashes and burns, Google still has a major competition problem against itself with the free YouTube video platform. Google already set the bar low for free access to music and videos on YouTube, and the public is conditioned to that. I think it’s a worthy effort on Google’s part to merge the two services, but in the end, I think the public has already chosen their streaming platforms. I’d bet that within the next five to 10 years, Google will just buy out one of these streaming competitors, if the antitrust laws will allow for it.