Fred Wilhelms 's Techdirt Comments

Latest Comments (5)

• On the post: How Sirius' Move Towards 'Direct Licensing' Is Bad For Artists

  

  Fred Wilhelms ( profile ), 10 Nov, 2011 @ 09:34pm

  Why are these deals so dangerous to artists now when the major labels made the exact same directl licenses with discounted rates with last.fm and others? I don't recall the unions or other so-called "artist advocates" being up in arms about those deals, either. As David Oxenford so clearly reminded everyone earlier this week, SoundExchange and the majors loved these deals when they testified in front of Congress.
  
  http://www.broadcastlawblog.com/2011/11/articles/internet-radio/the-debate-over-sirius-attempt-to-directly-license-music-soundexchange-once-said-a-marketplace-negotiation-to-adjust-for-high-rates-was-to-be-expected/
  
  One more thing SoundExchange isn't telling you: Back when the major labels started cutting those deals, the prospect of having the money go straight to the labels and paid under contractual royalty provisions (as the Copyright statute requires) was upsetting enough that SoundExchange decided it was capable of amending Copyright law on it's own without having to ask Congress for permission. The result was called the "Manager's Amendment" (ostensibly because the idea came from several artist managers on the Board) under which SoundExchange could ignore the law that limited their authority to collect and distribute royalties to the statutory licenses and start to offer the same services on the directly negotiated licenses cut by the major labels.
  
  Now, maybe you can overlook the sheer illegality of privately amending Copyright law. And maybe you can overlook the fact that by taking over the administrative costs of collecting and distributing direct license royalties, SoundExchange, and the statutory royalty payers and payees are subsidizing the direct licenses (and freeing up the major label from having to pay those costs themselves). But now, from the horror stories that SoundExchange is spreading about the potential harm to its beloved artists by direct licenses not struck by the major labels, it has clearly introduced an element of discretion into who gets the advantage of the "Manager's Amendment" and who doesn't. SoundExchange, so willing to help out the majors on their deals, now appears ready to deny the exact same treatment to independent labels and their artists.
  
  If there was any question left that SoundExchange is nothing but a tool of the major labels, and that the so-called "artist representatives" on the Board of Directors have completely abdicated their responsibility to the artists they purportedly represent, this sordid little episode should put those doubts to permanent rest.

• On the post: Responding To SoundExchange… By Their Numbers

  

  Fred Wilhelms ( profile ), 12 Jan, 2010 @ 11:36am

  Re: Re: Re: SoundExchange and forfeiture

  Back several years ago, a SoundExchange spokesperson claimed in an interview that some artists were actively rejecting their royalties so that the money would be redistributed to other artists through a special fund set up for that purpose. When I contacted her to find out more about the "fund," the interview "mysteriously" disappeared. The spokesperson never apologized for spreading misinformation, but then, she didn't have to.
  
  Rather than outright corruption or incompetence, I believe we are simply seeing the usual RIAA arrogance and indifference to artists played out in very large type. The supposedly "independent" directors like Dick Huey, hand picked by the RIAA to fill that seat on the SoundExchange Board are obviously too impressed by being asked to sit at the "cool kids table" to challenge the cool kids who invited him. The so called "artist representatives" on the Board are also named by the RIAA and not one of them is accountable to artists for their actions in the boardroom. Staffers like Laura Williams don't question what they are told. As far as I can tell, the only SoundExchange employees who ever asked tough questions quickly became ex-employees.
  
  The bottom line is that, despite the protestations of gullible puppets like Dick Huey and paid hacks like Laura Williams, the organization would be just as happy if they didn't have to deal at all with the artists they "love." As it is, they relegate artists to second class citizenship. They cannot be members, they have no access to the books, and there's no Director who has to talk to them to keep his or her seat. SoundExchange is only accountable to the RIAA, and as long as that is the case, the environment of indifference and disrespect for artists will continue.
  
  The only people who can force the change is Congress, and, to make sure that doesn't happen, SoundExchange has been very happy in the past to throw big parties in D.C. nightclubs for Congressional staffers with performers like Wyclif Jean. The probability that these parties are funded with forfeited artist money clearly doesn't disturb anyone on the Board.
  
  You and I aren't in Congress. Our questions don't matter to them. As long as they have some drones to appear on message boards like this one and reflexively defend them without the slightest clue as to facts, they're doing just fine.

• On the post: Responding To SoundExchange… By Their Numbers

  

  Fred Wilhelms ( profile ), 12 Jan, 2010 @ 11:14am

  Re: What is SoundExchange's admin rate?

  AQ,
  
  The last time I asked, I was told the detailed information you want was "proprietary." "Proprietary" is classic RIAA-speak for "we don't want to tell you and we don't have to tell you, so go pound sand."
  
  Welcome to the wonderful world of SoundExchange, where the mere act of claiming a lower expense ratio than other organizations makes it true.

• On the post: Responding To SoundExchange… By Their Numbers

  

  Fred Wilhelms ( profile ), 11 Jan, 2010 @ 09:55pm

  The existence of a relative handful of artists who refuse to sign up shouldn't serve as an excuse for SoundExchange not to look for the rest, like they promised to do when they volunteered for the job. There are going to be artists who will not sign up. There are at least three group names on the list that include people who are (or were, the last time I checked) probably fugitives from justice. I seriously doubt the Singing Dogs will sign up. Nobody is going to find everyone on that list. That's no reason why SoundExchange shouldn't try their best to find as many as they can. They took on this job of their own free will, they weren't sentenced to do it.
  
  The record of the last three and a half years shows that SoundExchange has done a lousy job of looking for and finding artists, and outsiders have not only done it better, they've done it cheaper, and they've proven that SoundExchange's blaming the artists for not signing up is a specious defense.
  
  The forfeiture procedure is based on a Federal regulation modeled after the provision allowing PBS to recover mechanical royalties set aside for "orphan works;" compositions where the current legal rights holder cannot be identified or located. That provision is designed to free up a couple thousand dollars a year for a non-profit that depends largely on public support for financing. It requires PBS to show due diligence in looking for the payees and requires that the money for the licenses be set aside in a segregated trust account for three years before it can be recouped.
  
  SoundExchange refuses to divulge where the segregated trust accounts on the unpaid artists royalties are, or even if the accounts exist. As far as "due diligence" is concerned, all anyone has heard so far is vague references to the "many, many" artists who have been contacted but who have not registered. Furthermore, the money involved at SoundExchange is not, like the PBS "orphan works" account, a couple thousand a year which represents a tiny fraction of PBS's budget. At SoundExchange, the unpaid artist royalties constitute as much as 40% of the total artist revenue in a given year. That is the size of the "reserve" SoundExchange has established to pay claims for unregistered artists, so we're not talking about the PBS pocket change, but a large portion of the organization's revenue. In 2006, SoundExchange had aggregated about $75 million in unpaid artist royalties. In 2007 (as shown by the IRS return linked to by Angus), that number increased to $101 million (Line 54). SoundExchange's 2008 return has not yet been filed (or at least it has not shown up on Guidestar), but internal sources have confirmed that the undistributed artist royalty number jumped to $181 million by the end of 2008. Given the trend, there's good reason to believe the total is now over $250 million.
  
  That's a quarter billion good reasons why SoundExchange won't publish an up-to-date list. SoundExchange is trying to convince Congress that it is the only good choice to collect and distribute performance royalties from terrestrial radio stations under the Performing Rights Act. As big a snow job as they've been able to do on Congress over the years, it might just test their credibility if they have to make that pitch while admitting they already owe artists a quarter of a billion from their existing job.

• On the post: SoundExchange Claims To Open Up, But Somehow Its List Of Unpaid Musicians Has Disappeared [Updated: List Found]

  

  Fred Wilhelms ( profile ), 06 Jan, 2010 @ 05:17pm

  I missed it

  I couldn't find the unpaid artist list on the SoundExchange website when I made the original comment. I presumed it wasn't there. I was wrong, and there's no sense in making excuses for it.
  
  I stand by the rest of my comments, even if SoundExchange won't address them where I can see what their objections are.