Transcript: Copyright & Technology NYC 2020 Preview

Interview with Bill Rosenblatt

For podcast release Wednesday, December 18, 2019

KENNEALLY: The Music Modernization Act, signed by President Trump in October
2018, is the first substantial copyright legislation to pass Congress in decades and moves music licensing into the digital age. In 2021, artists will begin receiving royalties based on data supplied to the newly created Mechanical Licensing Collective.

Welcome to Copyright Clearance Center’s podcast series. I’m Christopher Kenneally for Beyond the Book. Establishment of the MLC is one of the most important copyright infrastructure projects undertaken this century, says Copyright and Technology conference organizer Bill Rosenblatt. In January at the Fordham Law School in New York, the annual Copyright and Technology gathering will devote most of its morning programs to the Music Modernization Act and the MLC, which expects to spend more than $33 million in startup costs, all funded by the streaming services. Bill Rosenblatt joins me now with details. Welcome back to Beyond the Book, Bill.

ROSENBLATT: Thanks a lot, Chris. It’s always great to be with you.

KENNEALLY: I understand, Bill, that though you cover copyright and technology in all its facets, in all the media, your heart really is in music, and it shows this year, because a good part of the morning’s program, as I mentioned, really does focus on the Music Modernization Act and the Mechanical Licensing Collective. You have a keynote speaker, David Israelite, who’s been one of the key players in establishing or passing first the Music Modernization Act, and presumably from there helping to establish the MLC. Tell us about him.

ROSENBLATT: First of all, my heart is in music right now, because that’s where the action is. But I’m always interested in technology issues related to copyright for other media types. It’s just that, as you said, this piece of legislation is the most important piece of copyright legislation to come along in quite some time. And our conference, as well as my blog, Copyright and Technology, have been following the issues that have given rise to this legislation – the difficulties that have occurred in making sure that creators get paid properly and accurately and timely for streaming music. The MMA is a purported solution to that problem. It’s a major development.

David Israelite, as you said, he runs the National Music Publishers Association, which is the biggest trade association for music publishers, which are administrators of musical compositions. One thing it’s always important to bear in mind when you’re talking about music and copyright is that each piece of recorded music that you might play on Spotify or hear on Pandora or any – listen to on the radio – has two copyrights that are distinct from one another. One is the copyright in the musical composition, which you can think of as like the sheet music – the notes and the lyrics. And the other is the copyright in the sound recording, which is the recorded performance of the composition. The owners of the former of those two are nominally a songwriter or multiple songwriters and one or more music publishers, which are administrators of those rights.

So the NMPA is the largest music publishers trade association, and David Israelite, as you pointed out, Chris, is one of the key negotiators who came up with this solution to the problem of streaming mechanicals and royalty payments. He negotiated with an organization called DiMA, the Digital Media Association, which represents in this case streaming music services, to come up with this legislation. So we’re very happy to have him. He’s been an outspoken proponent of solving this problem and a mover and shaker of attempts to solve the problem, and they’ve come up with a solution, which is this Music Modernization Act.

So the way we’re doing it at the conference is David’s going to be our keynote speaker, and he’s a very dynamic and exciting speaker, so it should be great to watch him. I’ve been on a panel with him and seen him close up in that way. And then after his keynote, we’re going to have a panel which is being set up by the MLC, by the Mechanical Licensing Collective, which is the royalty processing organization that the MMA calls into being. Alisa Coleman, who is the chair of the MLC, is putting together a panel, and that’s going to have representatives from, among others, the Harry Fox Agency, which is kind of the – think of it as the database operator that’s going to handle a lot of the functions of taking all these billions of datapoints of tracks being played on the streaming services and matching them to the musical compositions that are being played and then figuring out who needs to get paid, how much, and then issuing those payments. So we’re going to have someone from Harry Fox, we’re going to have a couple of people from the MLC itself as it’s being built with that funding that you mentioned, and perhaps one or two other people. So it should be very informative on what’s going on with building the MLC, with getting the MLC to adhere to its stated goal in the statute of launching in January of 2021.

KENNEALLY: You mentioned the word solution several times, Bill Rosenblatt, and you know, when it comes to talking about copyright legislation and technology, solution is a rare word. We usually just have problems. I wonder if you have some thoughts on how we got to this solution. What did it take to get the parties to agree?

ROSENBLATT: Well, the short answer to what did it take is many lawsuits for lots of money. (laughter) To give you a complete answer to that question would require a lengthy explanation of the way these different royalties are processed, but I’ll try to keep it short. As I mentioned, there are these two different copyrights, and for each of those two copyrights, there are a handful of potential royalty streams depending on what mechanism is being used to play music, whether it’s a streaming service like Spotify or Apple Music or whether it’s a download service like Apple iTunes or whether it’s FM radio or digital radio like SiriusXM or Pandora.

In the case of a streaming service – an interactive or on-demand streaming service like Spotify – you have these two sets of royalties, and the one royalty that we are focusing on is a royalty for what’s called mechanical rights on compositions, which are really about the rights to reproduce musical compositions. So when you play a song on Spotify, you’re reproducing the sound recording, which is a whole separate pile of royalties that involve record labels, and you’re also reproducing the musical composition being performed.

The way the law works, royalties are payable on each individual musical composition to all of the rightsholders in that musical composition – songwriters and music publishers. The problem is that when a streaming service plays a song, they know what the sound recording is, but what they don’t necessarily know is what the music composition is that is embodied in that sound recording – what tune are they performing?

That matching process has caused various problems. There have been accusations that the matching hasn’t been done accurately. There have been lawsuits regarding that alleged lack of proper matching function. And there have been agencies such as Harry Fox that the streaming services have hired to do this matching job on the streaming services’ behalf. This problem with the music composition data needing to be figured out on the fly almost and not being supplied to the streaming services in the first place – that’s what’s led to the problems. So what this legislation proposes is a single entity that processes all these plays instead of each streaming service being responsible for figuring it out by themselves. That’s one prong of it.

KENNEALLY: That covers the music piece of recording pretty well, Bill, but you are also going to be touching on licensing issues for non-musical audio, everything from spoken-word to comedy to texts of poetry and prose. That’s a panel you’ll be moderating. What are the special issues that non-musical works face?

ROSENBLATT: First of all, with talking about these streaming services – Spotify, Apple Music, Google Play, Tidal, etc. – they have these enormous catalogs of tens of millions of recorded audio tracks, and by my rough estimate, about 1% of those catalogs is not music – it’s comedy, it’s spoken-word recordings, etc. And 1% of several tens of millions is quite a large number in and of itself.

So one of the things about the Music Modernization Act is it treats everything that’s being played on one of these streaming services as a piece of music with an underlying music composition, and that’s not necessarily the case. Comedy, I would say, is the biggest category of non-musical works that are being played on these streaming services. So instead of a musical composition being embodied in a sound recording, you’ve got a spoken-word creative work that’s copyrightable or potentially copyrightable being embodied in a sound recording. That presumably has some rights and royalties attached to it, as well. So that’s one aspect that we’re going to cover in this panel is how do we deal with this in this streaming era?

Another aspect that we’re going to deal with, which I think is of increasing importance in the future, is the world of podcasts. So podcasts are an interesting place. They’ve really become a mainstream media type. Something like a third or more of the American public listens to podcasts

I have no specific information about this, but it’s my suspicion that in the future, platforms like Spotify – and Amazon Audible is another potential example – will want to keep all those listeners on the farm, so to speak, and not make these podcasts available to anyone who wants to listen to them for free on an app other than Spotify or Audible. Audible is actually already doing this kind of thing. So that’s another area to talk about. In fact, one of our panelists on this panel on January 15th is going to be copyright counsel at Audible, who is probably going to be talking about these issues. So podcasting is the other great area to explore on licensing of non-musical content.

KENNEALLY: Bill, you mentioned that litigation plays a role in spurring advancements in both development of technology, but also in legislation, and you’ll be looking at that – how that’s all working out in enforcement around image copyright. You’ve got a panel led by David Leichtman, who is the founding partner of his own law firm, Russell Bogart from Kagen & Caspersen, and Joe Naylor, who is the president and CEO of ImageRights. What’s that panel lining up to be like?

ROSENBLATT: Sure. Image copyright enforcement has become kind of a big deal lately – not that it wasn’t before, but there’s a lot of activity in image copyright enforcement. At the heart of that activity is technologies such as ImageRights’ technology, and of course there are others, that crawl the internet looking for unauthorized usages of copyrighted images.

What I want to explore with this panel – and David Leichtman is very heavily or highly qualified to do so as the moderator, he’s very experienced in this area – is, OK, you have these technologies for looking around to see what are potentially infringing images. Then the output of those technologies is evidence that gets introduced into litigation – gets put before a court, before a jury or a judge. And there’s an issue of what is that evidence? How good is that evidence? How reliable is that evidence? What form does that evidence need to take in order to be effective evidence at court, to be admissible, and so on? This is something that I think is very much worth talking about, because we’ve got people in the audience who are lawyers who deal with these issues and some who actually work for image licensing companies, whether photographers directly or stock image agencies, who are interested in how can we enforce our copyrights effectively in a way that gets results in courts? So that’s what we want to talk about here.

KENNEALLY: Fascinating, because a lot of what you’re doing is really talking about getting results in courts and getting results in the marketplace. We’ve been chatting with Bill Rosenblatt. He’s the organizer of the annual Copyright and Technology conference that comes to Fordham Law School on Wednesday, January 15th, 2020. Bill Rosenblatt, we look forward to seeing you there in New York.

ROSENBLATT: Thank you very much.

KENNEALLY: Beyond the Book is produced by Copyright Clearance Center. Our co-producer and recording engineer is Jeremy Brieske of Burst Marketing. Subscribe to the program wherever you go for podcasts and follow us on Twitter and Facebook. The complete Beyond the Book podcast archive is available at beyondthebook.com. I’m Christopher Kenneally. Thanks for listening and join us again soon on CCC’s Beyond the Book.