from the fact-checking-is-dead dept
That’s a fight artists are losing. It’s been 17 years since Napster, the online file-sharing software, began flooding the Internet with free, illegally uploaded music, devastating musicians and the industry. While Napster is long gone, the looting continues, only now it is technology giants like Google and SiriusXM, along with streaming services like Pandora, that are responsible.This is an interesting, and bizarre, claim, given that unlike Napster, the three companies named all pay a ton of money in license fees for the works in question. In fact, both SiriusXM and Pandora have struggled to reach profitability in large part because of the massive percentage of revenue that goes directly to record labels (note: not directly to the musicians themselves, which may give you a hint as to the real problem). Last fall, Pandora noted that it had paid $1.5 billion in licensing, with over $500 million of that coming in 2015 alone (and this was before the year ended). The company has shown that approximately 60% of revenue goes to licenses, and this is a capital intensive business, given that it has to stream a ton of content and bandwidth for that level of streaming is not cheap. Spotify, similarly, has claimed to pay out approximately 70% of revenue. A year ago, Spotify claimed to have paid out $3 billion, noting a run rate of over $1 billion paid to artists per year. YouTube has similarly paid out over $3 billion.
It takes quite a lot of gall to argue that these services, which didn't exist at all just a few years ago, but which have consistently moved people away from piracy by creating services that people like -- and which often pay more than 50% of their revenue in royalties, are somehow "looting" the industry. Does he not realize that without these services, it's likely that there would actually be more piracy, from which the artists would receive no direct remuneration? Would he prefer that? Or would he prefer that these companies be forced to pay even more so that they couldn't even exist any more at all, which would, once again, drive people right back to piracy? It makes no sense at all. To call this "looting" is nonsensical and not fact-based.
YouTube, which is owned by Google, is now the world’s dominant audio streaming platform, dwarfing Spotify and virtually every other service. Yet it pays artists and record companies less than a dollar a year for every user of recorded music, thanks to rampant piracy on its site (by contrast, Spotify licenses its music and pays $20 per user each year).This is comparing apples to oranges. Spotify is just a music service. YouTube is mostly other stuff, with some music. Notice that he doesn't compare Spotify to YouTube Red or to Google Music, which are more on par.
The problem has gotten so bad that, in 2015, vinyl record sales generated more income for music creators than the billions of music streams on YouTube and its competitors.This point was a talking point that the RIAA trotted out earlier this year and has already been debunked. Vinyl HAS NOT generated more income for music creators than music streams. That's just blatantly false. What the RIAA showed was that gross retail value of vinyl sales (i.e., ignoring actual sales price, as well as the cut that goes to retailers and other middlemen) was higher than the net amount that was paid in royalties on just ad-based music streaming (i.e., ignoring all of the subscription and paid revenue). This is worse than an apples to oranges comparison. And, even then, with those caveats, Taplin's claims go way beyond what the RIAA actually showed. The royalties from vinyl that actually went back to artists were a lot less than what went to artists from ad-supported music streaming, not to mention all music streaming.
Either Taplin is lying or he's totally misinformed.
Google has also leveraged its dominance in Internet search into a cash cow built on advertising. But Google doesn’t care if your search for the movie “Mean Streets” or the music from “The Last Waltz” (both of which I produced) brings up licensed versions or pirated copies: The company sells ads and cashes in either way. Creators, however, get nothing from those stolen copies — except the anguish of watching others grab the value of their life’s work.Okay, let's try it. I searched for "Mean Streets" on YouTube and on Google's video search. I don't see a pirated copy anywhere. YouTube does show me a licensed version and a variety of obviously fair use clips (all less than 5 minutes). Google Video search seems to just show me the theatrical trailer and some fair use clips.
Google has basic “digital fingerprinting” technology that could scrub both YouTube and its search results of illegal versions. But instead of safeguarding the work of artists, Google wields this tool as a bludgeon. Creators can either enter into a licensing agreement with YouTube at very low royalty rates, or get left at the mercy of pirates. What looks like protection for copyright holders is more of a protection racket benefiting Google.This is blatantly false. Not only is it blatantly false, but just last week at the Copyright Office hearings in San Francisco that Jonathan Taplin attended, when someone claimed this, Fred von Lohmann from Google pointed out that it is absolutely false -- something he has now reiterated on Twitter:
And all of that raises the question of why the NY Times allowed it to be published without doing even the slightest fact checking?
Unfortunately, there is a sad history of undervaluing musicians in the United States. Terrestrial radio, a $17 billion industry, pays publishing rights (payments to songwriters) but has never paid artists or record companies for music.Yes, some could make an argument that this setup is unfair, but the market suggests otherwise. The reason that the law said that performers didn't need to be paid was because it recognized that radio was promotional. And it is. That's why every few years the recording industry gets caught up in a new scandal about payola. That is, the copyright holders of the sound recordings have long recognized that radio play is so valuable that they will pay extra money under the table to make it happen, even if that's illegal. Obviously, if the radio play wasn't so valuable, this wouldn't be happening. And yet now they want to get paid extra for that value? That seems to be the exact opposite of what the market suggests is the power dynamic here.
In addition, the satellite radio company, SiriusXM, pays below-market royalties, thanks to a giveaway it first wrested from Congress 20 years ago."Below market"? Based on... what? Again, SiriusXM has struggled to barely reach profitability. After years of losses, it has been profitable recently, but just barely.
Conglomerates like iHeartMedia (formerly Clear Channel Communications) and other online services like Pandora, which are required to pay artists for digital streams, have exploited federal copyright law to deny payments for work recorded before 1972 (songwriters are paid; performers are not). This means artists like Aretha Franklin, Ella Fitzgerald, Chuck Berry and John Coltrane never received a dime from AM/FM radio and or from many digital services for some of their greatest music.The pre-1972 stuff is a long and complicated story that we've covered in detail, and has a lot more to do with the fact that pre-1972 sound recordings are not covered by federal copyright law than any willful plan to "exploit" anyone. And there's a simple solution to this: put those works under federal copyright law. But you know who's fought hard against that? Taplin's friends in the RIAA. Maybe he should take it up with them. He also ignores, of course, that Pandora recently agreed to pay $90 million for those recordings, despite it not being clear if it needs to, legally. Is Taplin asking how much of that money will actually go to artists? Hmm...
The last meaningful legislation in this area was the Digital Millennium Copyright Act in 1998, which was based on the idea that creators should monitor the Internet for illegal copies of their works and give “notice” to websites and services to take pirated material down. Under the act’s “safe harbor” provisions, any service or site that makes a minimal effort to address these notices is immune from liability for piracy or theft."Minimal effort"? He seems to be ignoring the vast number of lawsuits, including the one against Veoh, in which Veoh won, but had to shut down over legal fees. It also ignores the fact that basically every other platform spends a ton of money handling takedown notices.
And it ignores the fact that most services have implemented filters and tools that go way above and beyond what the law requires. Why would Taplin ignore all of this? Why would the NY Times let him do so?
That system may have made sense when it took minutes to download an illegal song. But today no individual can effectively police the millions of pirated files that mushroom online and reappear the instant after they are taken down. Google alone received almost 560 million takedown notices in 2015.And, again, Google spent $60 million building ContentID and related tools that go way beyond what the law requires and gives copyright holders the ability to either monetize their works in new ways or to issue a "notice and staydown".
There are two concrete steps Congress can take that would allow musicians to be treated fairly. First, Congress should update the safe harbor rules of the copyright act to achieve the balance that was intended: protecting creators with effective tools in exchange for not burdening Internet companies with liability. That means strong, well-defined consequences for repeat offenders, easing the process for filing notices and ensuring that services are using the best technology to take pirated material off their sites and keep it off.So, basically, after flat out lying throughout the piece, and pretending that Google doesn't already have these tools, he wants a law to require such tools. Note: Google already has everything Taplin is asking for. But it spent $60 million putting that together. If Taplin got what he wanted, he'd lock in Google/YouTube as basically the only players able to handle this market. Does he want new providers and services or is he trying to kill the market entirely?
Second, Congress can address the original sin of AM and FM radio and close the loophole that allows radio companies to use music without paying artists. The Fair Play Fair Pay bill, which has Representative Jerrold Nadler of New York as a sponsor, would ensure that all music creators received fair-market-value pay for their work no matter what technology or service was used to play it. It has the support of hundreds of artists like Rosanne Cash, Duke Fakir of the Four Tops, Elvis Costello, Martha Reeves, Elton John and Common.Again, given payola, it's hilarious for him to argue that this is necessary, but he's entitled to his opinion -- just not his own facts.
In 2015, after years of battling pirates, Prince said in an interview that the Internet “was over for anyone who wants to get paid.” With Congress’s help, it needn’t be.Prince was wrong then and he's wrong now. There are more musicians making money from the internet today than ever made money prior to the internet. There are content creators using YouTube, Spotify, Songkick, Soundcloud, Amazon, Apple, Kickstarter, IndieGogo, Patreon and many, many more services to not just make money but to build strong and lasting relationships with their fans.
Again, it's no surprise that Taplin would lie. It's kind of his thing when it comes to his misguided and misinformed anger at the very innovation that's saving the entertainment business. The question is why the NY Times, a paper that prides itself on accuracy, would allow a piece so blatantly false to be published.
But, really, the most disturbing thing about this is that it perpetuates the myth that it's "content creators" v. "the tech industry." This is nonsense. Technology has been a major force in enabling more content creators -- including myself -- to create content, to promote it, to distribute it, and to monetize it. More people than ever before are making and distributing music, videos, books, software and more... because of these tech platforms. This isn't a zero sum game. There are opportunities for everyone to benefit, and setting up this false dichotomy that when one wins the other loses, Taplin and the NY Times are actually setting everyone up to lose by not just misrepresenting reality, but totally misunderstanding the very nature of both creativity and innovation.