Corporate Copyright Scofflaws 0003

The largest copyright pirates are the large corporations, particularly in the content distribution business. Yes, those companies who scream the loudest that their customers are ‘pirating’ movies, songs, books, etc. In this series, we are going to look at cases where these companies have engaged in large scare copyright infringement.

In all cases I will be working with published information. It is possible that this information may not be up to date, or may not accurately reflect the current status of the copyright infringement. If I am supplied documentary evidence which shows a different status, I will publish an update. In cases where a lawsuit ensued, and the settlement was sealed, I will not update the published information, unless I am provided with:

1) A copy of the settlement
2) Permission to publish the settlement

While I realize this may cause problems for one or more of the parties involved, I believe in only publishing things I can reference.

Note that the above text will appear in every article, if you’ve read it once, feel free to skip down to the divider.

*****

This one is a beauty, because I’m not sure who the scofflaw is. Sound Exchange is ‘THE” royalty collection society in the United States. There is a decent article on Wikipedia about them, the most important part of which is this:

SoundExchange is designated by the Librarian of Congress as the sole organization authorized to collect royalties paid by services making ephemeral phonorecords or digital audio transmissions of sound recordings, or both, under the statutory licenses set forth in 17 U.S.C. § 112and 17 U.S.C. § 114.[6] As of January 1, 2003, SoundExchange is designated by the United States Copyright Office to also distribute the collected royalties to copyright owners and performers entitled under and pursuant to 17 U.S.C. § 114(g)(2).[6]

OK, so Sound Exchange is supposed to collect the royalties, and remit them to the artists. This is where things get really murky. Since Sound Exchange is a non-profit organization, it legally cannot keep the royalties collected, though it can and does charge a fee. This is all reasonable enough. But Sound Exchange has been accused for years of deliberately not finding artists, and also has been accused of working too closely with the Recording Industry Association of America members, instead of the artists that they are supposed to represent.

A classic example is the Sound Exchange unpaid artist list from 2006. The list was supposedly put together for an attempt to find artists who were owed money, however it raises a lot of questions. First, how did Sound Exchange get so far behind in paying out royalties, and second, why didn’t they go looking for artists?

I was curious, so I grabbed a copy of the list, and did some looking myself, pulling names at random from the list.

Al Berard – found

Alan Di Cenzo – found

Alfonso Nigro – found

Andrea Stocchetti – found

Anne Karin Kaasa – found

OK, I found five out of five. Now I’ll admit that this isn’t 100% fair, the list was put together in 2006, and, well, a lot more people are using the internet in 2010. And Google has improved their search algorithms. Still if these people were that hard to locate in 2006, I wouldn’t have expected to find all five, in less than a couple of minutes.

Sound Exchange is supposed to be working for the artists. Supposed to be. At least that’s what they claim. This is a list of current Board members from their site:

Board

SoundExchange’s Board of Directors is a balanced representation of all parts of the music industry. Major and independent labels, recording artists, artist representatives, and interested coalitions all have a seat at the SoundExchange table.

Our current board members:

Mitch Bainwol – RIAA

Richard Bengloff – American Association of Independent Music

Jay L. Cooper, Esq. – Recording Artists’ Coalition (RAC)*

Andrea Finkelstein – Sony BMG Music Entertainment

Michael Hausman – Michael Hausman Artist Management, Inc.

Jeff Harleston – Universal Music Group

Kim Roberts Hedgpeth – AFTRA

Dick Huey – Toolshed

Steve Marks – RIAA

Walter F. McDonough, Esq. – Future of Music Coalition (FMC)*

Tucker McCrady – Warner Music Group

Alasdair McMullan – EMI Music North America

Kendall Minter – Rhythm & Blues Foundation

Patricia Polach – AFM

Patrick Rains – PRA Management

Martha Reeves – Artist

Perry Resnick – Music Manager’s Forum-U.S.*

Tom Silverman – Tommy Boy Entertainment LLC*

I’ve marked some names in blue, and the reason I’ve marked them in blue is that Sound Exchange is supposed to be responsible to musicians, and the names in blue are remoras. For those who don’t know what a remora is, it’s a fish which attaches itself to larger marine animals, like sharks or whales to get a free ride. It offers nothing back to the animal is rides, nothing at all, and it couldn’t exist without it’s ride.

All of the names in blue, are getting a ride off of musicians. If musicians didn’t exist, they’d have to get a real job. Unlike remoras they do offer some services, for example the RIAA member companies are good at pressing compact discs and delivering them to stores. However there is good reason to question why they would be on the board of Sound Exchange. Sound Exchange is supposed to collect royalties for artists. That the board is partially staffed with representatives from corporations, rather than the artists themselves is troubling to me – there is an apparent conflict of interests when a company that is being sued by artists for non-payment is on the board of Sound Exchange. At the very least, one would expect them to recuse themselves until after the lawsuit is settled.

Yes, I’m being rough on the RIAA members in particular. They do have a valid interest though. Fifty percent of the royalties collected go to the copyright owner for the recording. So if EMI records me, they get fifty percent of the royalties when the song is played. This may be why the RIAA member companies are so down on independent artists, especially independent artists who use an independent studio, and own the copyright on their own recordings… I have a suspicion that they’d try to make the sale of recording equipment illegal if they thought they could get away with it. But that’s just a suspicion.

And of course there is the question of who is the actual scofflaw? Did the RIAA members not supply Sound Exchange with contact information for their artists? Or did Sound Exchange just not put out the effort to find the artists? I’m not the only person who is asking this, here are some words from Fred Wilhelm, a lawyer who has clients in the music industry

SoundExchange’s informational tax return showed that the total amount of royalties retained exceeded $100 million at the end of 2007, and I am told was north of $180 million at the end of 2008. I’m sorry, Laura, but you can’t blame that number, and that increase, on artists who don’t answer their mail or webcasters who misspell an artist name.

Even if it IS their fault, you folks, as the self-proclaimed artist advocates you are, should be moving heaven and earth to get that money to the right people. And if you’re the effective artist advocates you say you are, that number should be dropping, right? Is it going to drop this year?

But beyond that, saying you are committed to do the job is not the same as doing the job. Telling me you are advocates doesn’t ring as true as seeing actual evidence of your advocacy.

As Marcellus said in Hamlet:

Something is rotten in the state of Denmark.

Quite possible we’ll never know exactly what. I doubt that Sound Exchange is going to tell us.

Wayne Borean

Thursday January 28, 2010

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