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Kevin Casini: ‘Stakeholders need to take a long-term view with the Copyright Royalty Board’s rate-setting proceedings’

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The US Copyright Royalty Board (CRB) is poised to re-open comment on the proceedings called “Phonorecords IV”, to determine the rates and terms applicable during the period beginning January 1, 2023, and ending December 31, 2027, for the section 115 statutory license for making and distributing certain configurations of phonorecords of nondramatic musical works.

The recent decision from the CRB to reject an agreement between organisations representing labels on one side and music publishers and songwriters, has opened a debate about the access to the CRB procedures by all stakeholders.

In this op-ed, copyright lawyer Kevin Casini — also Entertainment Law Professor at Quinnipiac University School of Law — offers a perspective on a path forward.

Kevin Casini

The CRB will reopen, yet again, public comment in Phonorecords IV.

When there is a proposed settlement, the Copyright Royalty Judges (CRJ) are required to “provide to those that would be bound by the terms, rates, or other determination set by any agreement . . . an opportunity to comment on the agreement and shall provide to participants . . . that would be bound by the terms, rates, or other determination set by the agreement an opportunity to comment on the agreement and object to its adoption as a basis for statutory terms and rates.” 17 U.S.C. 801(b)(7)(A)(i). Any new settlement triggers a new comment period.

As we get to that, and prepare for the larger discussion to come regarding streaming rates, a perspective to keep in mind:

People, advocates, entities, and parties concerned with fair royalty rates for music need to refocus their energies and re-set their priorities. My top-down prescription for making the most out of what could be a pivotal and precedent-setting decision, and a chance to build towards larger growth, deeper trust, and more understanding.

Losing perspective of long-term benefits

It occurs often in court cases: parties engaged in litigation get so focused on winning, on beating the “other side”, they lose perspective of the long-term benefits a scorched-earth approach may leave on the table. For party one, the emotional payoff of preventing party two from getting what it most wants makes it seem the same as party one getting what it most wants. That’s not always the case.

Further, the bifurcation of royalties for some uses set publishers and labels at odds with one another, while some other uses have them advocating against streaming services. The very concept of “one side versus another” may cloud otherwise clear views, and misalign incentives, actors, and desired results.

As each stakeholder positions itself to navigate the many proceedings, cases, actions, that go into establishing costs, rates, and in turn “value” of music in the current industry, alliances, coalitions, and bedfellows change.

Focus on outcomes

Considering we’ll all be back here sooner than later, what approach allows for movement in the desired direction and avoids eroding the ground from which to negotiate in a few short years?

  • Ignore the reductive casting of a binary rate-setting procedure, with a winning side and a losing side, and instead pledge to see this as an arena with corners, rather than strictly adversarial in an either-or proposition. While the segmentation of the cost/value of different rights makes fighting each fight both expensive to win and costly to lose, the big picture can offer clarity.
  • Recognise the procedure’s strengths, and weaknesses, and choose coalitions accordingly. Timing is key, and knowing the rules can empower your voice in ways that elevate it above others.
  • Identify (harness) a value in the opposing viewpoint, and wield it to your advantage where possible. Is there another road to your ultimate destination? One with fewer potholes, or less traffic?
  • Understand the positions of vocal parties, their constituencies, and their motivations. Meet people at their level and never presume you already know all their incentives. It’s okay to ask.
  • Reject the idea of whitehat/blackhat actors. Choices have outcomes, driven by decisions, based on motivations. Nothing more, nothing less. Re-align the choices, or factors, accordingly. For the most part, everyone wants to serve their communities, and well.
  • Identify what could be a collaborative resolution, and advance in that direction where possible. As much as we focus on the negotiation/case/issue at hand, the same parties come together in all corners of the industry. Collaboration can serve to build trust, pave roads, and pay dividends.
  • Be aware of (and open to) opportunities to build trust — advance the conversation within the entire ecosystem. There are plenty of common goals surrounding say free speech, living wages, health care, that can coalesce as initiatives and bring together groups and stakeholders that appear as combatants in other instances. Looking beyond a zero-sum countdown and positioning yourself to avoid the “race to the bottom” would allow for a unified front in, say, the pursuit of full rights payments to artists and performers from terrestrial radio.
  • Be slow to lionise or demonise any side. Accept that even those atop the organizations work for their constituencies. Understand their motivations, and you can make sense of their actions.
  • Dismiss a cult of personality. Too much credit and blame are foisted onto figureheads. Pay attention instead to the collective voice with which the sectors speak; the common themes presented in the aggregate.
  • Focus on outcomes, not credit. If you make it about yourself then you’re chasing the reaction, not the result.

None of this is possible without all stakeholders being heard.

Grow the proverbial pizza pie

By definition, associations serve their members. The downstream impact is identifiable and quantifiable, but it cannot supplant direct advocacy from the indies. Independents (be they publishers, labels, writers, or artists) are independent for any number of reasons, and taking their temperature, their recommendations, and their direct advocacy and input improves our data set, expands our options, and may provide more paths to success.

None of this is to say involved parties aren’t glad to drive the value of digital music close to zero, for reasons outlined in this space before. But few things in life, and fewer in litigation, are as simple as good v. evil. Casting any “opponents” as unworthy of trust, or motivated by your destruction, rather than their growth, forces things to be played as a zero-sum game, which may not always be an open path to your desired outcome.

Taking a 30,000-foot view of all combined issues in the differing debates, actions, and proceedings that occur, and then realising how each leverages the others, can serve to grow that proverbial pizza pie.

As in all things I do, I’m for larger pizzas, and more slices for everyone, especially me and mine. A less pugnacious, bellicose approach makes room for that. Recognizing nuance, empathizing in such a manner that allows us to understand motivations, and pinpoint acceptable outcomes, and we can win, short-term and long-term.

By Kevin Casini

Emmanuel is a Washington, DC-based freelance journalist, blogger and media consultant, specialising in the entertainment business and cultural trends. He was the US editor for British music industry trade publication Music Week. Previously, he was the editor of Impact, a magazine for the music publishing community (2007-2009), the global editor of US trade publication Billboard (2003-2006), and the editor in chief of Billboard’s sister publication Music & Media (1997-2003).

Creative Industries

Calendar — Week 21, 2024

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MAY 2024

- May 28

Board of Directors of the International Confederation of Societies of Authors and Composers (CISAC) in Seoul, South Korea.

- May 30

General Assembly of the International Confederation of Societies of Authors and Composers (CISAC) in Seoul, South Korea.

JUNE 2024

– June 2-8

Canadian Music Week conference (June 3-5) and festival (June 2-8) at the The Westin Harbour Castle in Toronto, Ontario.

– June 10-13

Indie Week in New York, organis...

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Copyright & Regulation

EU adopts the Artificial Intelligence Act

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The Council of Europe has approved the AI Act, a legislation aimed at harmonising rules on artificial intelligence in the Union. All 27 EU members have approved on May 21 the compromised text presented by the Belgian Presidency. A minimum of 15 countries representing 65% of the EU's population was necessary to get the text through.

The legislation — which sets a precedent in the world — relies on a "risk-based" approach. The Council said the Act "can set a global standard for AI regulation."...

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Collective Management Organisations

Licensing hub ICE reaches €1 billion in distributions over a period of 12 months

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ICE — the digital licensing platform co-owned by the UK's PRS for Music, Germany's GEMA and Sweden's STIM — has disclosed that for the first time it has distributed more than €1 billion to rights holders in a consecutive 12-month period (May 2023-April 2024 inclusive). ICE has now delivered a cumulative amount of €4.5bn to its members and clients since its first royalty distributions in 2016.

"It took just under 3½ years to reach the first €1bn in distributions, just over two more years to...

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