Musicians want fairer streaming fees; inventors want patent licenses

In a digital world, fair compensation for creative expression or new ideas, like music and inventions, requires more determination than ever.

Intellectual property piracy has become an insidious problem, affecting a wide range of  individuals and industries, including recording and technology.

The effect of low payment – as opposed to no payment – has been particularly harsh on recording artists. They have had the challenge of policing the frequently unauthorized use of their work, getting their music taken down (and kept down), and being paid fairly by valuable streaming services who claim that they are not profitable.

Spotify, Pandora, YouTube and others have made it difficult for artists to permanently take down songs and videos that they are not being fairly paid for or that should not have been posted in the first place. While fans may enjoy the mostly free access, it has made it extremely difficult for less well-known artists to survive in the industry. For most of the big names, the possible loss in recording revenue can be made up in performances and merchandising.

Musicians: Update the Law

Napster was a turning point.  Shut down by court order in 2001 after just two years of operation, the online service enabled MP3 files to be easily shared. The recording industry and artists had little choice but to respond by surrendering preventing the digital distribution of their work or accepting the poor terms – if they were even offered. Streaming services legitimized file-sharing. It’s been more than a decade since Napster was shut down, and artists and labels are finally fighting back about the meager pay rates for their material. They are demanding, among other things, that the Digital Millennium Copyright Act (DMCA) a 1998 law, be updated.

They want to change the law so that music and video streaming services will be required to remove permanently material that they are not authorized to provide. It will be interesting to see if Congress complies.

YouTube claims that it has paid out over $3b in royalties, although that amount was initially attributed to all of Google, YouTube’s parent company. Bank of America values YouTube at $80b, more than all but 66 of the S&P 500 companies. (An article from Bloomberg News is worth reading, here.)

Don’t get me wrong. YouTube is a convenient, well-organized service that offers consumers an affordable alternative to network and cable TV and iTunes.  It claims to have paid some 15 million content providers. But the-1x-1 question is what amounts and to whom?

Angry Headliners, Too

In an article in the The New York Times, “Music World Bands Together Against YouTube, Seeking Change to Law,” it was reported that while YouTube is a vital platform for promoting song and discovering new talent, “it has never been a substantial source of revenue and is a vexing outlet for leaks and unauthorized materials.”

Now, even highly successful artists like Pharrell Williams, Katy Perry and Billy Joel have signed letters asking for United States copyright laws to be changed.

It is no accident that recording and visual artists face similar obstacles as other IP holders – notably inventors and patent holders. Since passage of the America Invents Act, it has been anything but easy for patent holders to stop the unauthorized use of their invention rights, or to get fairly paid for them.

Consumers are Complicit

“New services and platforms are great for consumers,” says Johathan Taplin, a music and film producer who has worked with Bob Dylan and Martin Scorsese, “but our weak laws have allowed them to siphon revenue away for the underlying music, leaving song-writers, performers and the he whole industry choking on their dust.”

Taplin is Director of the Annenberg Innovation Lab at the University of Southern California Annenberg School for Communication and Journalism. See Do you love music? Silicon Valley doesn’t.”

It Ain’t Over Until It’s Over

In 2015, after years of battling pirates, Prince, an innovator in controlling the distribution of his work, said in an interview that the Internet “was over for anyone who wants to get paid.”

Let’s hope that blatant disregard of the source of creative expression and new ideas will not continue unchallenged. For less well-known musicians and visual artists who depend on revenue from streaming and copyrighted songs as a means of survival the future may be a little less bleak. Young tech companies, inventors and universities, who are finding difficulty securing patent licenses have yet to turn the corner.

 

Image source: nytimes.com; bloomberg.com; BofA/Merrill Lynch Global Research

About Bruce Berman

IP trend spotter, consultant and author.

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