John Rudolph, Chairman, Elias Arts;
Jeff Freundlich, COO, Wired Whirled Music;
Brian McNelis, Sr.Vice President of Music and Soundtracks, Lakeshore Entertainment.
Moderator: Michael Laskow
Brian McNelis (right) must have said something pretty funny when he got big laughs from fellow panelists Jeff Freundlich (left) and John Rudolph (center) during their panel at TAXI's 2015 Road Rally.
Editor’s Note: This part of the Keynote Interview might be a little tricky to follow, but it’s extremely important information about the future of the music industry and how your rights as creators are affected today, and could be affected in the future.
The discussion can be very technical as it relates to rights issues. It might take reading some sections twice to grasp it! I know, because I had to read some of the sections more than twice to edit them, and make them a little easier to follow. If you hang in there and invest the time it takes to read and grasp these critical issues, you could be far ahead of many other songwriters and composers, and hopefully be a leader in protecting composers’ rights in the near future!
Jeff, what’s your take on the TV networks or production companies building in-house music libraries?
“I can see a place pretty soon where we’re not going to have mechanical performances, synchronization and all these other things. We’re gonna have a license; this is the amount you’re paying me, and that’s going to involve all these relationships—whether that’s straight with the ISP or that’s with YouTube.”
Jeff: I cannot believe I’m saying this, but I’m gonna say it. Two years ago somebody respectable in the industry, like somebody that I had a lot of respect for, came to me and said, “We have a great opportunity on a TV show. We will pay you $200,000, but we are going to retitle everything in your library and we’re gonna take half the publishing. And I told the guy to get lost. We are not doing that. The system was not set up for this purpose, but you can exploit the system and do these things. You’re right about TuneSat. There are false positives; it’s kind of like this algorithm that gets out there and says, “Okay, I’m listening to your audio file, and I think I’m hearing it in this show,” and it’s successful. But the truth is, until BMI and ASCAP and SESAC stand up and say, “Stop doing this,” it’s going to run rampant in the industry, and it already is. I mean, we’ve walked away from a lot of deals that would be very lucrative, but at the end of the day, we decided that it was not who we are, it’s not who we want to be. We felt that all we have is our integrity and would rather do things the way that we think it’s supposed to be, which is that you are writing music, and we are representing it, and here it goes. You can license it from us, and we’ll even give it to you at a good rate, but you’re not going to start taking a piece of our pie.
I want to clear up something that you said, just as a precursor to this topic. You know, you were talking about that writer’s share as being sacrosanct, and I just want to be clear… I don’t know if there are people in this room that are aspiring to be composers on TV shows. I was on the soundstage at NCIS yesterday just hanging out. They are a good client of ours, and we were just shooting the breeze or whatever. But the composer on that show has two people below him that also write for that show, and they’re work-for-hire agreements, right? And under the copyright law with work-for-hire, you are not entitled under work-for-hire to receive your writer’s share. It can be granted, and it needs to be granted to you through like a federal writing. I’m sure you’ve got legal experts here on panels that can speak more to this, but I would never take somebody’s writer share. To me, I don’t think that’s the right thing to do. I know some companies that do that as well. But if you are trying to become a composer for a TV show or film, the chances are you’ll probably have a work-for-hire deal where maybe you’re working under another composer, and you might be doing 80% of the work, but you might only get 10% of the writer’s share. That’s kind of a reality of how you… I don’t want to say everybody, but many people, that’s how they start. It’s an apprenticeship. And that’s legal, so yeah, I think writer’s share is sacrosanct, and you should kind of eat what you kill, so to speak. If you do the work, you should get the money. But I think in reality, that’s not necessarily how it works if you’re composing for…
You know, Hans Zimmer. How many people does Hans Zimmer have working for him writing songs? I mean, he comes up with the main theme, and he’s got other guys working on the details. And that’s just how this world really works.
John: Just a legal point. There is no such thing as writer’s share/publisher’s share, just as a note.
“I would never take somebody’s writer share. To me, I don’t think that’s the right thing to do. I know some companies that do that as well. But if you are trying to become a composer for a TV show or film, the chances are you’ll probably have a work-for-hire deal where maybe you’re working under another composer, and you might be doing 80% of the work, but you might only get 10% of the writer’s share.”
John: Well, there’s nothing in copyright law. It’s a business convention that has evolved over years and years and years. So if you write a song yourself, you own 100% of that copyright. And the idea then is if you do it, you enter into a contract and with a publishing company—and that could be your own publishing company and you’re doing an assignment at that point of that copyright. And I think all of this is going to evolve. I don’t want to get into too much of a futurist mode, but I can see a place pretty soon where we’re not going to have mechanical performances, synchronization and all these other things. We’re gonna have a license, this is the amount you’re paying me, and that’s going to involve all these relationships—whether that’s straight with the ISP or that’s with YouTube. I mean, it’s ridiculous on some level that the deal with YouTube is you pay this license fee to publisher or the writer, and then a carve out of that goes to the performance society in that agreement, but there is no synchronization grant, but you agree that you won’t sue for synchronization. So if I kind of do the logic on that, so no synchronization exists—this is just a license…
Brian: I love what I’m hearing from you. It’s really refreshing and awesome. I love this idea – just to kind of expand on some of the things I said earlier in response to your point. You know, I believe in markets. The reason why an aspiring composer writes 80% of a score for a TV show and gets 10% of the writer’s share is because that’s a market dynamic. There is an exchange of values that’s happening there where everyone is a willing participant. I believe in markets; I believe in a willing buyer; I believe in a willing seller; I believe in the negotiation. I believe that I can ask for a price, and I believe that you can either pay for it or not pay for it. What I don’t believe in is that I can set a price and you can take and do what you want with it, and then come back to me and say, “It’s only worth this.” And that’s exactly the world we’re living in. What I love hearing on the stage is there is no real technological impediment to fixing the problems that we have. The problems that we have are the result of political will. I want to make this really clear—you are that political will. It’s you [people in the audience], it’s nobody else. It’s your life, your money, you are that political will. What I’d love to see is… You said something that I never really thought about before, which is; what if there was an option on YouTube that said, “I choose to license this, synchronize, or I choose not to. And if I choose to synchronize it, this is what you have to pay me. And there’s a little box, you go, “Yes, I choose to synchronize it and I want $5…or I want $100…or I want $500,000, because I’m just crazy that way.” And then the other side says, “Well, no, I’m not going to pay you $5 or $500,000.” Or maybe I just check it and I say, “No, I’m not going to grant you a license.”
John: So the great thing is that technology exists.
Brian: I believe it does.
John: …and it solves a problem. It’s called “RADkeyTM.” It was developed by Rumblefish, and if you go into the CMS side in YouTube, you will now see a little thing in there—and right now it’s a blunt-force tool—that if you put your license number in there… So that pre-market transaction happened over here, and that license then goes in. It automatically happens if you publish through certain technology in, and that task happens.
Brian: And I love the idea if you say no…This is our biggest problem—we don’t have the ability to opt-out and say no. If I want to pass on an opportunity because it doesn’t make sense for me, then it should create an opportunity for somebody else for whom it does make sense. So if my music is playing in the background of a YouTube video and I go, “Nope, I don’t want it there,” they flag it, they mute it and it goes through an open-market cascade waterfall of automated algorithmic bidding system where somebody gets that opportunity, and they get paid for it what they agreed to get paid for it—not less, not more. And that’s really what’s missing from the entire conversation is the ability to put us back into a true market where we have a willing buyer, a willing seller, the ability to negotiate and get compensation for that consumption. It’s not rocket science; this is how the world worked prior to 1999…mostly.
John: It happens on ads now. Every one of those little ads you see on any website page, or wherever you go, that’s what’s happening. So how can it not work for us, right? It’s like ridiculous.
Brian: Dude…high five! So they figured out the very mechanism to make sure that you can be fairly compensated when it comes to their business, which is slathering the Internet and advertising, against giving away your content for free. But they haven’t figured out how to use the exact same technology to empower you into that market where you can get paid.
John: I’m gonna get a little kumbaya with Brian for a second. He’s got me fired up, because I basically kind of live elements of this every single day with a bunch of different technology companies. But I will tell you, it may not necessarily feel like it, but keep it going. Your voices are actually being heard.
Brian: The last thing I’m going to say on that is, you know, people often say with YouTube there’s all this content being uploaded. They get 48 hours of video every second or ever minute, it’s impossible, blah, blah, blah. You know, it’s interesting that iTunes doesn’t have any of these DMCA issues. “Kelly 129” has not uploaded the Led Zeppelin catalog via TuneCore or CD Baby to iTunes. There is one Led Zeppelin catalog on iTunes, and it’s from Atlantic Records and everybody knows it, and Apple does not have this problem. The alleged complexity over rights is a manufactured problem, because iTunes doesn’t have this problem.
“There is one Led Zeppelin catalog on iTunes, and it’s from Atlantic Records and everybody knows it, and Apple does not have this problem [figuring out who owns the rights]. The alleged complexity over rights is a manufactured problem, because iTunes doesn’t have this problem.”
Who has manufactured it, and what’s their motivation for doing so?
Brian: Well, if you could get the Led Zeppelin catalog for free because Kelly 129 in Boise uploads it, and you can slather that with advertising and make a lot of money on it, that’s probably a motivation, I would guess, to not have to pay for it. I mean, I’m just guessing. I think that if Atlantic could get the Led Zeppelin catalog from Kelly 129 in Boise and not have to pay Atlantic Records, they would probably like to do that too. But it’s an issue of intent. You know, the problem about rights management is it’s a manufactured problem, because there are legal, legitimate, good citizens in the ecosystem that don’t have these problems. And if one person doesn’t have the problem, nobody should have the problem. And for as much as we have issues with the compensating and financial issues with Spotify, you have to give them credit for the fact that they are a legal and licensed service. Spotify doesn’t have the same problems that YouTube has. So if these issues can be worked out through the intent of companies that can actually do it right and do it legally, why can somebody else not figure it out? And the last thing I’ll say about this—about filtering everything else—this is a crowd-source challenge. And you may not want to do this because of its implications, I understand that. But, you know, the thing that we hear… Look, I love YouTube. Nobody loves YouTube like I do. I love cat videos; I think it’s a great platform. I don’t have anything disparaging to say about Spotify or YouTube or Google or anybody, but clean it up, guys! Just clean it up! Just run a clean, honest business; let’s all be friends; let’s do it. Just knock off the nonsense. We love you, we love cat videos and we know that Kelly 122 in Boise doesn’t have the Led Zeppelin catalog. Knock it off.
But here’s the thing. If you want to talk about filtering and excuses and stuff, you’ve got one argument is that iTunes and Spotify can do it and they don’t have a problem. There’s no infringing, we’re not sending millions of DMCA notices to Spotify and Apple every day over rights issues, because we know it’s worked out. The other thing is, for all that video content that is uploaded to YouTube—48 hours a second, whatever it is—there is no live porn on YouTube. Zero. Now, if you can figure that out…
John: Is someone here going to admit that that’s not true?
Brian: You know, what’s the definition of porn? I’ll know it when I see it, right? So somehow they can figure that out.
And Brian knows because he’s been looking. [laughter]
John: Cat videos… porn. [laughter]
Brian: But you know the idea is, there is this very kind of selective conversation that happens that you just need to be kind of aware of. Some of the things that you are being fed are not necessarily the truth, and they are your rights. They are your rights. Downstream, ultimately, no music equals, no business. Period. And you [people in the audience] are the front end of that equation.
Don't miss Part Four of this Keynote Interview in next month's TAXI Transmitter!