is a practicing attorney, experienced deal negotiator, and a seasoned advisor of intellectual property rights who protects musicians, songwriters, music publishers, Grammy and Emmy Award winners, and legacy artists and their catalogues through deal negotiations and proper intellectual property management.
Erin M. Jacobson has been named a 2018 Rising Star and one of the Top Women Attorneys in Southern California by Super Lawyers.
Super Lawyers rates outstanding lawyers from more than 70 practice areas who have attained a high-degree of peer recognition and professional achievement. This selection process includes independent research, peer nominations and peer evaluations.
Erin will be featured in Los Angeles Magazine as a Super Lawyers Rising Star, and again later this year as one of the Top Women Attorneys in Southern California.
Erin M. Jacobson, Esq. in Los Angeles Magazine as 2018 Super Lawyers Rising Star
Erin M. Jacobson, Esq. in Los Angeles Magazine as 2018 Super Lawyers Rising Star
This article was previously published on Forbes.com.
When you stream music on Spotify, are you aware that as you are enjoying your favorite song, Spotify might not be paying the person who wrote that song?
Spotify has been sued for upwards of $345 million by Bob Gaudio and Bluewater Music Services Corporation for failure to pay mechanical licenses when their compositions are streamed on Spotify. Gaudio, a former member of Frankie Valli and The Four Seasons, wrote and publishes some of the group’s biggest hits including “Sherry,” “Big Girls Don’t Cry,” and “Walk Like a Man,” as well as Valli’s solo hit “Can’t Take My Eyes Off of You.” Bluewater administers the publishing for compositions like Player’s “Baby Come Back,” Miranda Lambert’s “White Liar,” and Guns ‘N Roses’ “Yesterdays.”
Streaming requires several licenses –sound recording licenses from the record labels; performance licenses for the compositions from performance rights organizations such as ASCAP and BMI; and mechanical licenses for the reproduction of the compositions. While Spotify has deals with the major labels, and blanket licenses with ASCAP and BMI, Spotify has not complied with the requirements for mechanical licenses and payments for all compositions streamed on its platform. Obtaining a mechanical license in the United States is compulsory, meaning that a person or company wishing to reproduce a composition must follow the guidelines in Section 115 of the United States Copyright Act to serve a “Notice of Intent” on the copyright owner and pay said owner the compulsory license fee. Spotify has followed this procedure for compositions affiliated with the Harry Fox Agency (the closest body the United States has to a mechanical rights society), but there are many compositions not affiliated with the Harry Fox Agency that Spotify would need to contact and pay directly – and Spotify largely has not done so.
This is not the first time Spotify has come under fire for its inadequate licensing practices. In 2016, Spotify reached a $30 million dollar settlement with the National Music Publisher’s Association (NMPA) for unpaid mechanical royalties, and Spotify just settled another class action suit for $43.4 million dollars. While maximum statutory damages rates are $150,000 per infringed composition, Bluewater claims that Spotify will only have to pay songwriters $4 per infringed composition after litigation fees are paid. Per the previous settlements, Spotify must also implement a better system to properly track and pay mechanical royalties, and Bluewater asserts this has not yet happened.
The attorney for both Gaudio and Bluewater is Richard S. Busch, most recently in the news for his representation of Marvin Gaye’s estate in the “Blurred Lines” case. Echoing my previous sentiments, a press release citing Busch’s complaint sums up the issue in a single sentence: “Songwriters and publishers should not have to work this hard to get paid or have their life’s work properly licensed, and companies should not be allowed to build businesses—much less billion-dollar businesses—on the concept of ‘infringe now and ask questions later.’”
*This article does not constitute legal advice.
Erin M. Jacobson is a music attorney whose clients include Grammy and Emmy Award winners, legacy clients and catalogs, songwriters, music publishers, record labels, and independent artists and companies. She is based in Los Angeles where she handles a wide variety of music agreements and negotiations, in addition to owning and overseeing all operations for Indie Artist Resource, the independent musician’s resource for legal and business protection. Ms. Jacobson also serves on the boards of the California Copyright Conference (CCC) and Association of Independent Music Publishers (AIMP).
Digital uses of music require various types of data embedded in and tied to digital music files – called metadata. Metadata includes data like the copyright owners of the compositions and master recordings, ISRC codes (unique identifying codes for master recordings), ISWC codes (unique identifying codes for compositions), performance rights organization affiliations, and other information. One large problem with current metadata within the industry is a problem of matching. Music publishers and record labels often need to match data so certain sound recordings are matched to the composition embodied within them, or that certain uses can be matched to the exact sound recording and composition used. However, there is not yet a good system in place for totally accurate matching, which means a lot of extra work for rights’ holders to identify uses of their works in order to collect the payments associated with those uses.
The other problem is the lack of correct metadata. Oftentimes, identifying correct metadata is like identifying the correct message in a game of telephone. Between the publishers, labels, distributors, and other involved entities, metadata that may have been correct at the beginning of the chain is often incorrect by the time it reaches a stage of usage, resulting in incorrectly identified (or unidentified) owners who don’t receive payments because it is unclear who to pay.
Metadata is often incorrect for several reasons: (1) human error of employees incorrectly inputting data, and (2) lack of communication stemming from either rights’ owners not being clear on their shares of ownership or co-owners not sharing ownership information, (3) companies that have been sold or gone out of business with no clear successor, and (4) people who claim ownership of shares to which they do not actually have rights. In addition, many rights owners (often songwriters) do not want their ownership shares made public because they feel the ease of third parties figuring out what they earn will decrease their bargaining power.
There has been a longstanding argument within the music industry for the need for a centralized database containing all relevant ownership information for all songs. There was an initiative to create the Global Repertoire Database (GRD) to solve this problem, however, the initiative failed reportedly due to companies not providing their data, side initiatives focused on mini-GRD projects, and lack of funding. Although the GRD failed, there are other possible alternatives. CISAC, which is a worldwide collective society of author organizations, supports CIS-NET, a global network of ownership information powered by Fastrack. CIS-NET will be available to CISAC member societies, but not the general public or digital service providers.
Significant attention has been focused on using Blockchain technology to create an open database that is not governed by any one body and can be contributed to by multiple sources. This is a similar principle to the Wikipedia model. The advantages of using Blockchain technology for a centralized music rights database include: the data on the platform is encrypted and run across multiple computers making it difficult to hack; its Bitcoin protocol supports micropayment amounts, making it easier for rights owners to receive that $0.0007 payment and receive it directly; and its decentralized nature allow for rights’ owners to correct information on the rights they own.
However, in my opinion, there needs to be a centralized body to oversee the database to protect against bogus claims and try to discern correct data when inconsistencies are present. Further, while it is great that Blockchain technology can pay artists and writers directly, the technology needs to be implemented in such a way that representatives of rights’ owners like performance rights organizations, music publishers, record labels, attorneys, etc. are not circumvented, as those representatives are essential to handling important business functions for artists and rights’ owners who need to spend their time creating instead of drowning in the minutiae of administration.
The music industry needs a central database with correct information, splits, metadata, etc., both for cohesiveness within the industry and for information transparency to increase the efficiency and reliability of receiving payments. While Blockchain puts forth some real advantages, there is one element that Blockchain or any other database will never have – the human element. The music business is a business of relationships, a business run by people who manage and guard the rights of the music. Therefore, we can only achieve a winning proposition if the business can implement the technology in a way that supports the structure of and the people within the music business.
Last weekend I had the pleasure of attending and speaking at the annual National Association of Music Merchants (NAMM) convention in Anaheim, CA (right by Disneyland!). NAMM is a fantastic time to see incredible instruments, hang with musicians and industry folk, and conduct business.
Check out my video above where I take you behind the scenes at the convention, and here are some fun photos from the weekend below.
Hung out with Elvis for a while…
Channelling Paul McCartney at the Universal Audio booth!
