Archive for the ‘copyright’ Category

Stem Helps Split Royalties, and Takes Off as Music Distributor

February 7, 2017

By BEN SISARIO NY Times.com 2/5/17

When Frank Ocean’s album “Blonde” came out in August, it went straight to No. 1 and became the talk of the music business because it was released completely outside the usual channels of the recording industry. The mystery was how Mr. Ocean and his team did it.
One answer was revealed on Sunday in an online ad promoting “Blonde” as one of the most acclaimed releases of 2016 and noting that it was “powered by Stem.”
That service, which began only a year ago, has quickly become a player in a fast-growing corner of the music industry: online platforms that cater to independent artists by distributing their music to streaming services and organizing the many strands of royalties that accumulate from fans’ clicks.
Stem, founded by three 20-somethings in Los Angeles, has attracted a clientele of young artists who operate independently yet tend to collaborate frequently with other acts, some of them stars. For them, Stem’s attraction is its ability to easily manage the complex “splits” — the divvying up of royalties among multiple parties — that result from such collaborations. Stem Disintermedia, the company behind it, has raised $4.5 million from investors, including Upfront Ventures and Scooter Braun, who is the manager for Kanye West and Justin Bieber.
The indie music sector already has a well-established network of alternative distribution companies like TuneCore and CD Baby, which deliver unsigned artists’ work to online services for what is usually a small fee. But those services have no means to divide the royalties if a song has, say, two producers and five writers, an example of the kind of collaboration that is now common in pop. Instead, the main performer would be responsible for accounting.
Stem eliminates that burden by tracking every collaborator on a song, and requiring all parties to agree on percentage splits. Milana Rabkin, Stem’s chief executive and one of its founders, compared the service to online payment apps that let friends easily split a restaurant tab.
“In a world where Venmo exists,” Ms. Rabkin said in an interview, “why isn’t there a Venmo for Apple and Spotify?”
Stem’s consensus model, however, could also be its Achilles’ heel, since it will not allow any party to be paid until all agree on the splits, a process that gives holdouts bargaining power. Ms. Rabkin said that most projects reached consensus in a few days and that the longest had taken “a couple months.” The service takes a 5 percent cut on royalties.
Representatives of Mr. Ocean declined to comment on exactly how he had used Stem. But aside from the album’s initial appearance on Apple Music — when it was delivered directly to Apple — Stem appears to have been the vehicle used to release “Blonde” to most major services. Stem distributes music to Spotify, Apple, YouTube, Amazon, Tidal, SoundCloud and several other outlets.
While Stem’s model was novel when it first appeared, it now has competition. In December, CD Baby quietly introduced a new distribution service, Soundrop, which, like Stem, tracks royalty splits — although without the consensus requirement — and caters to a generation more likely to post songs on YouTube and think about making money later.
“It’s an opportunity to reach a demographic that wants to create differently,” said Kevin Breuner, the vice president of marketing at CD Baby. “Music distribution is a secondary thought to them.”
Stem, by contrast, is catching on among a class of young professionals who often operate independently but may be involved in the highest creative levels of the business. Its clients include Childish Gambino and the electronic producer Deadmau5. The company says it has distributed 6,000 pieces of content that have been streamed 500 million times.
Dina LaPolt, a lawyer representing Deadmau5, said her client was using Stem to track his music on YouTube, but explained that Stem’s royalty-tracking system was particularly important to artists in managing the otherwise daunting task of tracking royalty splits.
“Music is the only business in the world where the artist is responsible for doing all the paperwork,” Ms. LaPolt said.
Among Stem’s most vocal advocates is Anna Wise, 28, a singer and songwriter who won a Grammy Award for her work with Kendrick Lamar. She was working as a nanny before she began using the service, which she said had provided her with a steady income — “enough to pay Brooklyn rent,” she said — and devote herself fully to making music. Her latest album, “The Feminine: Act II,” released through Stem, comes out on Feb. 17.
The company’s system, she said, allows her and friends to quickly and transparently arrange deals among themselves, maintaining control and minimizing any disruption to creativity.
“It’s essentially like a smart contract,” Ms. Wise said. “It’s easier and simpler, and I love easy and simple.”

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Beatlemania Returns to Canada: This Time, in Public Domain, Spurring Fight

September 3, 2015

Eriq Gardner hollywoodreporter.com 9/02/15

And what a complaint at the Canadian Competition Tribunal might mean for James Bond.

In early February, a half century after The Beatles created a frenzy upon North American shores, Love Me Do became the top-selling CD at Walmart stores in Canada.

The reason why might be partly tied to Canadian copyright law. Until recently, sound recordings were only protected for 50 years. As a result, early ’60s recordings by The Beatles, The Rolling Stones, The Beach Boys and others have fallen into the public domain up north to go alongside works like Ian Fleming’s James Bond character that have also become subject to a lesser copyright term.

Taking advantage of this fact is a company called Stargrove Entertainment, which began producing CDs full of public domain recordings and then selling them at retailers like Walmart for five bucks each. The cheap Beatles albums introduced to the Canadian market earlier this year were a hit.

But what happened next, according to Stargrove’s 408-page filing on Tuesday with the Canadian Competition Tribunal (read in full below), was interference by vertically integrated music giants, Universal and Sony.

Although the recordings were free to be exploited by anybody, a Beatles album embodies compositions necessitating the clearance of publishing rights. This usually happens without a fuss. “In practice, the market for the issuance of mechanical licenses operates as though it were a compulsory system,” states Stargrove in its filing. “The process is so automatic that record labels press and sell CDs before obtaining mechanical licenses.”

In January, Stargrove says it made an application for mechanical licenses for The Beatles Love Me Do and Can’t Buy Me Love, The Rolling Stones Little Red Rooster, Bob Dylan It Ain’t Me Babe and The Beach Boys Fun, Fun, Fun. At about 8 cents a song, Stargrove submitted a royalty payment of $13,799, the check was cashed, and the titles went on sale at Walmart.

Then came the fireworks. The publishers (including ABKCO, Casablanca) allegedly sent out instructions to a Canadian agency charged with such license applications to stop issuing mechanical licenses to Stargrove.

Stargrove’s royalty payment was refunded. And Stargrove’s CDs came grinding to a halt, according to the filing.

“The Title Holders are withholding mechanical licenses in order to artificially extend copyright over recordings that should be in the public domain,” charges Stargrove. “They are doing so in direct response to the legitimate competition that Stargrove’s low pricing policy was bringing to the market. As set out above, some Title Holders have record label divisions, while others are affiliated with record labels. They do not like the fact that Stargrove was able to gain market share so quickly.”

The complaint doesn’t go into much detail about the supposed collusion between recording and publishing arms at the big companies, but it attempts to set out a claim for refusal to deal, price maintenance and exclusive dealing and goes even further with an allegation that Universal Music Canada CEO Randy Lennox e-mailed Stargrove’s primary distributor to get them to back away from Stargrove products and to partner with Universal to resolve what he called a “public domain issue.” Another employee at Universal is said to have created reviews on Walmart’s website, complaining of the poor quality of Stargrove’s products.

Stargrove says it has lost out on opportunities, and that its sales are now zero. Sony/ATV declined to respond while Universal hasn’t yet responded to a request for comment.

In June, Canada extended the copyright term from 50 to 70 years for published sound recordings, meaning that late ’60s recordings by The Beatles are no longer on the precipices of being in the public domain there. The new law doesn’t revive the copyright of works whose term has already extinguished — The Beatles Love Me Do isn’t now back into copyright — nor does it impact the duration of literary works.

That means that Fleming’s early descriptions of the James Bond character in books like Casino Royale are in the public domain in Canada, which provoked some discussion about implications earlier this year. Some legal observers have theorized that the rights-holders of the Bond films still have copyrights (covering newer authorship), trademarks and business relationships to potentially interfere with any film adaptation that attempted to leverage a public domain version of the character. The latest action at the Canadian Competition Tribunal over early ’60s sound recordings has the potential of setting some boundaries on use of market power.

An Old Songbook Could Put ‘Happy Birthday’ in the Public Domain

August 5, 2015

BEN SISARIO http://www.nytimes.com 8/04/15

It is one of the most beloved and famous of all songs, belted out at countless gatherings for infant and octogenarian alike. Yet “Happy Birthday to You,” far from being as free as a piece of cake at a party, is actually considered private property.

A federal lawsuit filed by a group of independent artists is trying to change that, and lawyers in the case, in a filing last week, said they had found evidence in the yellowed pages of a nearly century-old songbook that proves the song’s copyright — first issued in 1935 — is no longer valid.

A judge may rule in the case in coming weeks. If the song becomes part of the public domain, it would cost the Warner Music Group, which holds the rights, millions of dollars in lost licensing fees. It would also be a victory for those who see “Happy Birthday to You” as emblematic of the problems with copyright — a song that has long since survived anyone involved in its creation, yet is still owned by a corporation that charges for its use.

“It is one of the few songs that you’ve heard for as long as you’ve lived, and you kind of think of it as a folk song,” said Robert Brauneis, a professor at the George Washington University Law School who in 2010 published a skeptical study of the copyright of “Happy Birthday to You.”

The case also highlights the centrality of copyright claims to media businesses like the music industry, where the question of who owns the rights to a song can be worth millions of dollars. Advocates for rigorous copyright laws point out that they protect musicians as well as the companies that represent them. Still, their interpretation can rattle the industry; that was the case in March, when a jury found that Robin Thicke’s song “Blurred Lines” had copied “Got to Give It Up,” a 1977 hit by Marvin Gaye.

Part of the dispute over “Happy Birthday” derives from the song’s byzantine publishing history. Its familiar melody was first published in 1893 as “Good Morning to All,” written by Mildred Hill and her sister Patty, a kindergarten teacher in Kentucky. Birthday-themed variations began to appear in the early 1900s, and soon “Happy Birthday to You” was a phenomenon, popping up in films and hundreds of thousands of singing telegrams in the 1930s.

Its appearance in a scene in Irving Berlin’s show “As Thousands Cheer” in 1933 led to a lawsuit, and in 1935 the copyright for “Happy Birthday to You” was registered by the Clayton F. Summy Company, the Hill sisters’ publisher. The song changed hands over the years, and Warner acquired it in 1988 when buying the song’s owner, Birchtree Ltd., as part of a publishing deal reported at the time to be worth $25 million. According to some estimates, the song now generates about $2 million in licensing income each year, mostly from its use in television and film.

Yet while the song is widely performed at private gatherings, its copyright status leads to peculiar workarounds in public settings. Chain restaurants often come up with their own songs to avoid paying licensing fees, according to Mr. Brauneis’s paper. On live television, it is not uncommon for an impromptu performance to be quickly silenced by producers.

Jennifer Nelson, who is making a documentary about the song and first filed the lawsuit against Warner two years ago, said that the company charged her $1,500 to use the song. The case, which has been joined by other artists and seeks class-action status, is being heard in federal court in Los Angeles. Plaintiffs want the song to be declared part of the public domain, and for Warner to return licensing fees dating to at least 2009.

“Our clients want to give ‘Happy Birthday to You’ back to the public, which is what Patty Hill wanted all along,” said Mark C. Rifkin, a lawyer for the plaintiffs.

Warner, which declined to comment for this article, contends in court filings that its copyright is valid. The song also generates hundreds of thousands of dollars each year for a nonprofit group, the Association for Childhood Education International.

Yet “Happy Birthday to You” has long been a prime target for critics of the laws that regulate copyright. Thanks to an extension made under the Sonny Bono Copyright Term Extension Act of 1998 — which was lobbied for heavily by Hollywood — the song remains under protection through 2030.

“The fact that ‘Happy Birthday to You’ is still under copyright is the most symbolic example of how copyright has expanded and overreached beyond its Constitutional purpose,” said Kembrew McLeod, a communications professor at the University of Iowa who has written about the song.

Mr. Brauneis contended in his 2010 study that the song’s copyright may not have been properly renewed when its initial term expired, in 1963. But lawyers for the plaintiffs in the “Happy Birthday” suit — for whom Mr. Brauneis said he was working as an unpaid consultant — now say they have proof of deeper problems.

Last week, they submitted evidence that they called “a proverbial smoking gun”: a 1922 songbook containing “Good Morning and Birthday Song,” with the birthday lyrics in the third verse. While other songs in the book are given with copyright notices, “Good Morning and Birthday Song” says only that it appears through “special permission” of the Summy Company. Under the laws of the time, an authorized publication without proper copyright notice would result in forfeiture of the copyright, according to lawyers involved in the case. Furthermore, under the 1998 law, anything published before 1923 is considered part of the public domain.

Warner argued that while earlier versions of the birthday song may have been published, they were not authorized by the sisters themselves. Also, no copyright covered “Happy Birthday,” the label argues, until it was registered in 1935, so there was no copyright to be invalidated in 1922.

A 1922 songbook that was submitted as evidence by artists claiming that “Happy Birthday to You” is no longer covered by copyright. Credit Wolf Haldenstein

Both sides have asked for summary judgment, and the judge, George H. King of United States District Court in Los Angeles, is expected to rule soon. Judge King could deny both motions and hold a trial — raising the possibility of a strange proceeding in which all principal witnesses are long dead.

As part of the evidence submission last week, the plaintiffs included a paper trail showing how they tracked down the songbook. It started with electronically scanned images from Warner of a 1927 edition of the same book, but with the publisher’s crucial permission line about “Good Morning and Birthday Song” blurred. Lawyers for the plaintiffs searched for other copies of the book and found one at the University of Pittsburgh; a 1922 edition was also located.

In a series of emails about the 1927 edition, a Pittsburgh librarian told Mr. Rifkin that the songbook had been found in a university storage facility.

“Here you go,” she wrote in sending it to him. “Surely the copyright hasn’t lasted this long.”