Former UMG Exec: Major Label Music Should Cost More And DMCA Safe Harbors Should Be Destroyed

from the st(r)eaming-pile-of-horseshit dept

If you’re going to argue against YouTube, Spotify, etc. and the supposed wholesale screwing of artists, it helps if:

A. You’re not a former member of an entity with decades of experience in screwing artists, and

B. You have some grasp of basic economic concepts.

Paul Young, a former director of licensing for Universal Music Group, has an op-ed posted at The Hill decrying the unfairness of streaming services and the wrongness of the DMCA. But any point he’s trying to make is buried under ignorance and the demand that some artists be treated more equally than others.

The music community’s grievances are the following: (1) The DMCA allows internet service providers to build ad-based businesses built upon infringing content that the artists cannot effectively police through “notice and take down” procedures; (2) If and when service providers pay the artists, it’s on the providers’ hopelessly complex terms, resulting in payments that offer fractions of pennies per view; (3) Service providers offer “free” teaser music to the public when copyright owners should have the absolute right to control distribution of their music.

(1) The DMCA sucks, but it sucks the way studios and labels wanted it to. Now they don’t like it and they want to change it to suck in a different way. They’re also arguing for “notice and STAY down,” which works out great for labels/studios… unless they’re inadvertently targeting their OWN site with unvetted DMCA notices.

(2) “Hopelessly complex terms” are included in almost every royalty agreement. Service providers don’t have a monopoly on this behavior.

(3) If copyright owners want “absolute control,” they’re free to pull their music, movies, etc. from services they don’t like. Not many have, because not many are willing to give up this revenue stream they constantly claim isn’t paying enough. As for the artists themselves, they have no “absolute control” — not if they’re signed to a label. Young may be writing about screwed artists, but he’s really only interested in protecting the “rights” of gatekeepers.

He confirms this by claiming major labels deserve to be treated better than other copyright owners.

Free music streaming is fair only for original, home-based music. However, what the public streams mostly comprises of premium, professional content. This content is expensive to create, risky to market and requires many behind-the- scene professionals.

It’s OK for service providers to screw the little guy. But don’t mess with the majors. They have oh-so-many mouths to feed — mouths that are more deserving of revenue than creators that don’t cut them in on the deal. Young wants a better deal for artists, but with a caste system attached.

Here’s more:

Every minute, 400 hours of footage is uploaded to YouTube, much of it synched to copyrighted music. [Note: citation needed.] This gives YouTube a distinct advantage over Spotify, Tidal, Apple Music and other services that do not offer user-generated streaming of works they do not control.

Much of this YouTube footage is monetized with paid ads. YouTube retains a minimum of 45 percent of this revenue, at prices it sets (but does not reveal), irrespective of the content’s creation costs.

Major label music should “pay” more — whether it’s a premium in subscription fees or a larger cut of advertising revenue payouts. Why? Because it costs more to make. But production costs have little to do with pricing — and that includes advertising revenue.

If we lived in Young’s world, tickets to “Paranormal Activity” (production budget: $450,000) would be $5 and tickets to “Avatar” (production budget $425,000,000) would be $4,700. [Productions costs taken from here.] Buying My Bloody Valentine’s “Loveless” would bankrupt music fans just as certainly as it nearly financially destroyed the label that released it, while Owl City’s basement-produced hit album could presumably be had for a handful of pocket change.

Young — and the label he worked for — appear to believe the internet owes them a living. But just them. Not the rest of these shabby artists the labels are unwilling to gatekeep for.

Once Young has finished deliberately misunderstanding how markets work, he moves on to the point of his op-ed, which begins with him recycling the stupid “built on the backs of artists” trope that presumes no service provider could ever become successful without engaging in copyright infringement. Then he goes right off the rails.

I would argue for stronger, industry-wide measures: a complete repeal of the safe harbor provisions of the DMCA and a prohibition on any unauthorized uploading of the property of others.

The first part is insane. Young actually wants service providers to be fully responsible for the actions of their users. Like the ongoing attacks on Section 230 of the CDA, this is a very lazy, very dangerous attempt to paint targets on the backs of those who have money, rather than perform the more difficult work of targeting the users who actually commit copyright infringement, make defamatory statements, etc.

This line of thinking says labels and studios need do nothing more than bitch loudly and expect everyone else to solve their problems — whether it’s websites, legislators, or internet service providers. This is how they “protect” their artists. By complaining stupidly and demanding the internet be torn apart and rebuilt to their specifications, damn the collateral damage.

The second part is just moronic. Every site prohibits unauthorized uploadings. Active efforts are made to police uploaded content and any site that wants to stay alive for long sets up a DMCA agent to respond to takedown notices. But it’s never enough. Young apparently feels current prohibitions just aren’t prohibitive enough, as though there were a magical tech solution somewhere that might prevent any unauthorized uploading from taking place ever again, if only service providers weren’t so busy raking in billions on the backs of major label artists.

The whole op-ed is an embarrassment. But, unfortunately, it’s par for the course in major label/studio arguments. It’s worse than the blind leading the naked. It’s the ignorant leading the angry. It’s short-sighted rent-seeking by people who somehow think they can force more revenue out of service providers by destroying the protections that have allowed them to prosper.

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Companies: umg, universal music group

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Comments on “Former UMG Exec: Major Label Music Should Cost More And DMCA Safe Harbors Should Be Destroyed”

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46 Comments
Agammamon says:

“. . . copyright owners should have the absolute right to control distribution . . .”

I’d say copyright owners should have very limited rights to control distribution.

The purpose of copyright, the reason these privileges are extended to content creators, is to *increase the amount of content* created. To turn around and allow them to deny access to their creation – which, absent CP protections you would just, you know, *freely copy* – would defeat the purpose of extending those privileges in the first place.

The Wanderer (profile) says:

Re: Re:

Slight correction: the purpose of copyright is to increase the amount of content available to the public, not merely the amount of content created. That is, it’s supposed to be an incentive not merely to create content, but to release it – to publish a book, rather than e.g. leaving the only copy of your manuscript in a box in the attic to be destroyed by water damage from a roof leak ten years after you die.

Everything else you mentioned is correct.

Tom Mink (profile) says:

Magic technology

Execs that advocate for automatic systems that can intelligently and consistently identify infringing content really aren’t thinking it through. If things like ContentID aren’t adequately doing the job (not that they care about the unacceptably high false positive rate) then extra smarts that add better judgement essentially puts them out of a job.

The ability to identify copied work is pretty much the same as being able to identify original work – the entire point of the music industry isn’t it?

bob says:

op-ed.

So if the best way to counter bad speech is to create more speech, is TechDirt going to submit an op-ed to The Hill?

I know you do a good job refuting false statements here on this site but submitting something to be published in another paper would help get more coverage.

Anyone doing a search of he issue is bound to find TechDirt but having something in The Hill right next to the original would allow uninformed people to more easily see the problems of copyright and DMCA.

PaulT (profile) says:

Re: op-ed.

“having something in The Hill right next to the original would allow uninformed people to more easily see the problems”

Of course it would. However, The Hill would have to agree to publish it in that way. I can’t say whether or not TD have forwarded anything to them, but it’s their discretion as to whether or not to publish. It’s possible that, having published such a litany of errors without comment, that they would be biased against such a refutation.

In the meantime, the great thing about the internet is that the authors here still have a platform, even if The Hill were to deny publication, be that for editorial reasons or a payoff by the RIAA.

Anonymous Coward says:

Re: Re:

That is already prohibited, it is called copyright infringement. The real target is not the infringer, otherwise known as pirates, but rather those services which enable self publishers to compete with the labels. If the can make these services liable for what their users upload, then they effectively turn them into publishers, with all the overhead of vetting submitted contents, along with getting legal disclaimers signed etc.
The labels do not want to compete at a service level, but rather force their competition to act as publishers, with all the overheads, and limited publishing of new works that go with due diligence as a publisher. The overheads of doing so would also force the services to significantly change their business model, to generate the income from the much more limited number of works on their platforms.

Anonymous Coward says:

What frustrates me most about this viewpoint is the idea that they are ‘entitled’ to certain returns from their product.

The idea of selling a product is to present it at a cost the consumer is willing to pay. If the product costs more to produce than the consumer is willing to pay, you don’t have a profitable venture, and must either (a) find a new product (b) find a way to bring production costs down to a level that makes them profitable or (c) find a way to add sufficient value to the product that the asking price becomes reasonable to the consumer.

The idea that music ‘SHOULD’ cost more money than people are willing to pay for it is absurd. The idea that a partnered revenue stream (such as streaming music) SHOULD provide them more of a cut than that revenue stream produces in its entirety is also absurd. And sickening.

I’m not sorry to say, I really don’t listen to any music they had a hand in creating, and it is NOT because I pirate music. It is because they aren’t the only people in the world making music, they are just the only ones making it hard to both discover and support their music.

I tend to discover new music through derivative projects like anime-music-video’s, remixes and covers, because I get most of my media from youtube. I like a certain anime, I look up music video’s people have made for them, and if a song grabs me, I look it up. The same video’s the labels do everything in their power to shut down, as demonstrated above.

While they are perfectly free to set their prices as high as they like, the market re balances itself. People seek convenience and value, and when they don’t provide it themselves, other people step in to provide it for them.

Most sickening of all is the arrogant idea that their music is worth more than anothers simply because they spent more money making it. Hint : If you are spending too much on making your product to provide it competitively, you aren’t running a good business. Movies have been guilty of this for far too long as well, and is the reason I never bother seeing things in the theater… with a few exceptions… which usually tend to BE the exception rather than the rule (Ala Deadpool).

Labels… you are a business. That means you are COMPETING with other music producers for revenue, not entitled to more of it than they are. That means you need to get your product recognition and exposure, not seal it behind so many vault doors nobody ever finds it. It means you need to provide additional value than just the composition, not shut down every single creative use people find for it, demanding it has the singular purpose of being listened to when you permit it and nothing else.

And no, I do not mean ‘stopping people giving it away for free’, I mean stopping each and every single possible use that isn’t ‘Listen to it on devices we approve of in a format we approve of for as long as we approve of you listening to it in that format and on that device’.

Market value is not relative to ‘how much it cost you to make it’, it’s relative to ‘how much you can make it worth our money’.

Deal with it.

Now if you’ll excuse me, I’m gonna listen to the Undertale soundtrack again. S’better than anything I’ve heard from them in a long while.

That One Guy (profile) says:

Half right isn't bad, right?

I agree with one point at least, though if anything I don’t think he goes far enough. Music from major label musicians absolutely should cost more, in the $1 per listen range, and/or $50-100 for a revocable-whenever-they-feel-like-it per song licence.

Not because of rubbish ‘production costs’ or anything like that mind, but simply because maybe if they start charging what they think they should be getting I imagine plenty of people will switch over to music made by indies which is just as good but generally sold by those that don’t hold their fans in contempt.

And of course how could you not just bask in the brilliance of this line:

‘Much of this YouTube footage is monetized with paid ads. YouTube retains a minimum of 45 percent of this revenue, at prices it sets (but does not reveal), irrespective of the content’s creation costs.

Hmm, how does that compare to the contracts offered by major record labels? Because offhand I’m guessing 45% is going to be no worse, if not much better than your standard record label contract terms, if for no other reason than YT doesn’t demand their cut in addition to the copyright over the work in question.

Someone formerly from a major record label really isn’t in a position to be throwing those particular accusations of ‘unfair contract terms’ unless they want to compare it to what they were offering the sods they conned into signing with them.

Anonymous Coward says:

So if ISP as responsible for the actions of their customers does that mean the record labels/movie studios should be responsible for the actions of their customers?

i.e someone listens to a violent album or watches a violent movie and then commits violence they studio can be held liable?

Some one listens to lyrics about stealing and then steals, the studio can be sued?

Mason Wheeler (profile) says:

The first part is insane. Young actually wants service providers to be fully responsible for the actions of their users.

I’m actually fully in favor of repealing the DMCA “safe harbor”, for exactly the opposite reason. Without the legalized extortion of the takedown system required to qualify for safe harbors, service providers could tell copyright trolls that it’s not their problem because they operate as a common carrier. The DMCA makes it their problem.

All of the problems we have with copyright abuse and the desire for ever-greater takedowns and “staydowns” is built upon the foundation of the DMCA. Get rid of it and the liability shifts to the person who posted the content, not the company that delivered it. Get rid of it, and we restore Due Process and the Presumption of Innocence–we restore basic sanity to digital copyright, in other words. Get rid of it, and we require studios to actually prove in a court of law that something needs to be taken down before it can be taken down.

Get rid of it!

nasch (profile) says:

Re: Re:

You think the MPAA and RIAA et al would just let service providers go about their business if the DMCA were repealed? No, they would launch a blizzard of lawsuits, and only the biggest players would be able to survive it. Would the suits have any merit? Does it even matter? That’s why the safe harbors are important.

Mason Wheeler (profile) says:

Re: Re: Re:

Would the suits have any merit?

No.

Does it even matter?

Yes, because after losing the first meritless suit, it would set a precedent. This would make future meritless suits that much harder. And with organizations like the EFF around, crushing a non-“biggest player” under the weight of a bogus IP lawsuit isn’t as easy as it used to be.

nasch (profile) says:

Re: Re: Re: Re:

This would make future meritless suits that much harder.

I would like to think that’s true, but with so many meritless suits after our legal system has been in place for so long, I’m not so sure. It doesn’t have to get very far to be cheaper to settle than to fight. Just discovery alone can be crippling for a small company. You’re right about EFF but there’s only so much they can do.

Mason Wheeler (profile) says:

Re: Re: Re:2 Re:

The thing is, this makes it prohibitively expensive for the publishers too. It would force them to focus on infringement that’s 1) real and 2) actually causing problems for them, and drop this ridiculous idea of “let’s use this tool to suppress anything and everything that’s not 100% under our control just because we can.

crade (profile) says:

Re: Re: Re: Re:

Wow, you must have a different U.S. history than I do.
They never lose the first lawsuit. The first person that manages to survive long enough to be likely to lose gets they just drop or settle. So does the next one and the next one. All the ones that aren’t willing to waste money fighting until that point just give them what they want. It’s not like this is breaking new ground or anything here

That One Guy (profile) says:

Re: Re: Re:3 Re:

That’s like saying a vegan is set up to eat meat. Just because it can doesn’t mean it does, will, or has any interest in doing so.

Patent and copyright trolling exists as viable(incredibly sleazy, but viable) sources of profit because the system doesn’t work like that. Make a bunch of accusations, if the mark fights back drop them and shift to another mark. Rinse, repeat.

Remember, all the rules go right out the window once someone invokes The Most Important Thing Ever, That Is Bestowed The Holy Name Of Copyright, so expecting a court to crack down on someone for filing copyright related claims is just a tad unrealistic.

PaulT (profile) says:

Re: Add it all up

Simple. Blue Monday was a great song, the 12″ not only a pioneering move in its physical for but highly influential in a number of ways. It was a quality product, innovative, made by true artists.

The RIAA don’t want that. They want cookie cutter, generic, easy to sell fodder created by glorified karaoke singers who they can ditch the second sales start to look shaky in favour of the next model. Like most corporations, their members are interested in the next quarter, not the next decade. Even if such a move were allowed, the band would have been ditched before the first weekend of sales had ended, and they’d probably have refused to release further copies to allow it to become a success.

Chuck says:

It is not my job to help you keep your job

Disregarding all the FUD in the article itself, there’s one side note I want to call attention to.

“Employs many people behind the scenes.”

This is irrelevant information. How many jobs your industry provides has absolutely, positively, nothing whatsoever to do with what I, your customer, am willing to pay for or how much. It doesn’t, and it shouldn’t factor into ANYONE’S decision to buy.

If your business model is valid, it will include proper planning to pay the number of employees you require to make that model work. If you can’t make the numbers work, the problem isn’t MY purchasing behavior, it’s YOUR business model.

Then again, I guess when corporate America has spent over 120 years (conservatively) getting whatever they want from consumers, by hook or by crook, it’s hard to adjust your thinking to take into account a world – the real world – where you don’t get to decide what WE buy any more.

And that’s why you’re failing.

That Anonymous Coward (profile) says:

Re: It is not my job to help you keep your job

It would be nice if he explained how much of a cut of each of those people behind the scenes get everytime the song is played. Of course the little people don’t get anything, but the management get handouts each and every time.

The labels are fat and bloated, and refuse to adapt to the real world. Praying they can just pass laws, buy influence, slow down the entire worlds progress until they decide they have to move forward.

They all bitch about YouTube, but they refuse to do the simple thing… stop using it.
They are unwilling to put any money into making something better they could profit from, and just expect the world to accept that the billions of hours uploaded only make money because music exists. That everyone owes them the lions share, when they only sometimes contribute a small piece to something.

They need to put their money where their mouths are. They need to withdraw from YouTube and go with the thing they made that is better. And when it fails because they can’t control it to the degree they want, they can again blame everyone but themselves.

YouTube isn’t the problem, the problem is they think a scratchy barely audible song playing softly in the background of a video of a baby dancing gives them the right to be paid & to control the entire video. Fair Use is always an afterthought, much like the Public Domain they have effectively destroyed. Its time we demand better from the copyright agreement, the public grants… and yet the public always gets screwed.

Anonymous Coward says:

Re: It is not my job to help you keep your job

Pretty much. It’s the same bullshit move on the lines of claiming that supermarkets, florists and truck-driving are all IP-intensive industries. None of those grunt work jobs ever merit a mention whenever lo and behold, the music industry boasts another record-breaking year and bonuses for their top executives. But when it comes to asking for payouts, suddenly there’s an army of people joining the line from behind the scenes that the music industry never thought to mention before.

If you choose to underpay your staff, blaming the problem on me for not tossing more money at you is a fucking dick move. For that matter, our governments have been tossing more money at the problem en masse. And here we are still, having to grapple with idiots like these because he chose to keep all the government bailouts instead of spending it on the very grunt workers who formed the basis of his propaganda campaigns.

Major label music should probably cost more, then he can watch what happens when you price your product beyond what people consider to be a reasonable cost.

PaulT (profile) says:

Re: It is not my job to help you keep your job

“How many jobs your industry provides has absolutely, positively, nothing whatsoever to do with what I, your customer, am willing to pay for or how much. It doesn’t, and it shouldn’t factor into ANYONE’S decision to buy.”

They know this, of course. In fact, modern corporations are built on this knowledge – offshoring, downsizing, automation, etc. All of that is to do with cutting costs so that each unit can make more profit without raising prices (as they know that this will usually lead to lost sales). Employees have always been expendable so long as they have the bare minimum required to create a saleable product. If they thought for a moment that customers valued the number of employees as a major purchase decision, these things wouldn’t happen.

What’s amusing is how the arguments have shifted. They’re not whining about piracy so much now, they’re whining about lower revenue from legal purchases and service providers with whom they have an agreed contract. That’s a much harder argument to make if armed with facts, so they try the emotional pleas instead.

CharlieBrown says:

Prices Based On Costs

Suits me. I like old content (which is becoming harder and harder to find in Australia) and I’d like the thought of getting some, say, Robert Johnson records for a few cents. Hey, most of his work was recorded in a back room with just him and his guitar. How expensive was that?

Pricing that way would price Britney Spears out of the market but would bring back nice music like Ella Fitzgerald. Of course, new music would still be there for those who can afford it.

Mind you, it would help if this stuff was all public domain like it was supposed to be. In Australia, all of Robert Johnson’s works have expired copyright. Ella? She’s mostly still tied up. Although she’s getting there.

TimothyAWiseman (profile) says:

Safe Harbors Are Vital

I wrote a law review article dealing with the DMCA. While my core point was a technical one about when Willful Blindness should apply, I spent a fair bit of time talking about how important the safe harbors are to allowing the internet to develop. This is something which is well established by numerous commentators and scholars in both the legal and economic fields.

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