By , November 12, 2012.

Internet radio service Pandora has been in the news in recent weeks as it gears up for a fight to reduce the amount it pays out to musicians, a fight that will take place in front of the public, Congress, and the courts. Most recently, Pandora has sued ASCAP, seeking lower license rates from songwriters and music publishers.

This might seem odd to someone unfamiliar with music and copyright in the US — how can you sue someone just for offering a price you think is too high? If you’re asking yourself that or something similar, read on.

Leaving Public Performance to the PROs

Recorded music by and large consists of two separate and discrete copyrights. One copyright covers the musical composition, which is the underlying song. The other covers the particular sound recording of that song. In addition, each copyright is actually a bundle of divisible rights; the holder of a musical composition copyright has the exclusive right to reproduce, distribute, create derivative works, and publicly perform the composition. 1The sound recording copyright includes all these rights except the right to publicly perform; instead, a sound recording copyright holder only has a narrower right to publicly perform “by means of a digital audio transmission.”

The public performance right of musical compositions is almost always administered by performing rights organizations (PROs). 2These organizations are sometimes also called “performance rights organizations”. The US Copyright Act uses the term “performing rights society.” 17 USC § 101. These organizations fall under a broader umbrella of what are called “collective rights organizations”, “collective management organizations”, or “collective societies.” These agencies don’t own the copyrights, they license them to various entities like radio stations, live venues, and websites, collect royalties, and pay them out to their members — these are blanket licenses, meaning a single license covers every song in the PRO’s catalog. The US has three PROs: ASCAP, BMI, and SESAC. Other countries have their own PROs. For example, SACEM in France, one of the world’s first PROs, has licensed public performances since 1847; Canada has SOCAN, and the UK has PRS.

ASCAP was formed in 1914 through the efforts of composer Victor Herbert and attorney Nathan Burkan to collectively administer the public performance rights of songwriters and composers. ASCAP would clash with radio broadcasters during the coming decades over compensation for public performance of music over the airwaves. In 1939, partially in response to a rate increase by ASCAP, the National Association of Broadcasters (NAB) created BMI as a competing performing rights organization.

Consent Decrees

Under pressure from NAB, the US Justice Department sued ASCAP and BMI in 1940, alleging violations of the Sherman Antitrust Act. As a result, both agencies entered into a consent decree with the government. 3United States v. ASCAP, 1940-43 Trade Cas. ¶56,104 (SDNY 1941); United States v. Broadcast Music, Inc., 1940-43 Trade Cas. ¶56,096 (ED Wisc. 1941). ASCAP’s consent decree was amended in 1950, establishing the authority of a district court to act as a “rate court” to settle disputes over rates when ASCAP and licensees could not reach agreement. 4United States v. ASCAP, 1950-51 Trade Cas. ¶62,595 at 63,754 (SDNY 1950). The ASCAP decree was amended again in 1960 and 2001. 5US v ASCAP, Second Amended Final Judgment, No. 41-1395 (WCC) (SDNY June 11, 2001). BMI was the subject of a second suit by the US in 1964, with a new consent decree in 1966, 6United States v. Broadcast Music, Inc., 1966 Trade Cas. ¶71,941 (SDNY). amended in 1994 to include a similar “rate court” provision. 7United States v. Broadcast Music, Inc., 1996-1 Trade Cas. ¶71,378 (SDNY 1994).

ASCAP and BMI together license the vast majority of musical composition public performances in the US. But there is a third performing rights organization in the US: SESAC. SESAC was originally formed in 1930 “to serve European composers not adequately represented in the United States.” SESAC does not operate under a consent decree. However, it is currently involved in a lawsuit alleging similar antitrust violations that resulted in ASCAP and BMI’s consent decrees. That lawsuit survived a motion to dismiss in 2011 and remains ongoing.

The consent decrees sharply limit ASCAP and BMI‘s conduct.

ASCAP, for example, is limited to licensing public performance rights on a non-exclusive basis — it cannot offer exclusive licenses or license any other right in the copyright bundle. It cannot prevent direct licensing between its members and music users, not can it offer different rates and terms to users who are “similarly situated” to existing licensees. And, perhaps most importantly, ASCAP is required to grant licenses to anyone who requests one. 8Though there are differences between the two decrees, both are broadly the same.

The Rate Court

The rate court provisions of the consent decrees are perhaps their most unusual aspect. The existence of a “rate-setting court” in the US is, in the words of one scholar, “extremely rare.” 9Daniel Crane, Bargaining in the Shadow of Rate-Setting Courts, 76 Antitrust Law Journal 307 (2009). Only a handful of consent decrees, mostly from the 1940s, 50s, and 60s, have included such provisions, and outside of ASCAP and BMI, only one court has actually ever exercised this function. 10Id., citing US v American Optical, 95 F.Supp. 771 (SDNY 1950). There is generally a deep skepticism toward US courts engaging in rate-setting. 11See, for example, Arsberry v Illinois, 244 F.3d 558, 562 (7th Cir 2001), noting a “historical antipathy to rate setting by courts, deemed a task they are inherently unsuited to perform competently”; In re Coordinated Pretrial Proceedings in Petroleum Products Antitrust Litigation, 906 F.2d 432, 445 (9th Cir 1990), “The federal courts generally are unsuited to act as rate-setting commissions.” In many other countries, such functions have been expressly delegated to governmental administrative bodies. 12Laurence R. Helfer, Collective Management of Copyrights and Human Rights: An Uneasy Alliance Revisited, Collective Management of Copyright and Related Rights, 75, 91 (Daniel Gervais (ed.), Kluwer Law Int’l BV 2010), “governments in nearly all countries in which CMOs operate exercise some form of regulatory control over licensing practices to prevent abuse of their dominant positions. The source, extent and enforcement of these regulations vary widely, however. In some countries, copyright laws limit CMO activities. In others, administrative agencies, tribunals or other specialized regulatory bodies monitor CMO activities and adjudicate complaints by licensees. In yet other nations, users seek relief from the courts by filing competition or antitrust claims against CMOs, leading to judicial monitoring of licensing practices in the form of detailed consent decrees”;

Simon Helm, Intellectual Property in Transition Economies: Assessing the Latvian Experience, 14 Fordham Intellectual Property Media & Entertainment Law Journal 119, 201 (2003), “An example is the Copyright Board in Canada. Invested with quasi-judicial powers, the Copyright Board functions as an arbitral tribunal, and its decisions have the effect of superior court judgments. Under the Canadian model, collective rights administrative societies are required to submit an annual tariff, which is then published. The Copyright Board has jurisdiction to receive submissions from interested parties in relation to the proposed tariff and to make any amendments to the tariff that it considers necessary. Canadian law also sets tariffs for wireless broadcasters based upon their advertising revenues. In cases where an individual license cannot be agreed between the collective rights administration society and a user, the Canadian scheme provides for the submission of the dispute to the Copyright Board for resolution.”

Regardless, in the US, a federal court — specifically, the Southern District Court of New York — plays the role of rate-making agency for music composition public performance licenses. Here’s how it works: under the consent decree, ASCAP is required to provide a reasonable fee upon request. If a potential licensee disagrees with the fee provided by ASCAP, it can bring suit in court. ASCAP has the burden of proving the reasonableness of the fee; otherwise, the court will weigh the evidence to determine a reasonable fee.

It is under this provision that Pandora has brought suit against ASCAP. Pandora has been operating under a license from ASCAP that expired in 2010, and, as Bloomberg has reported, negotiations over the past year for a new license have been unsuccessful. So, in a sense, it’s a bit imprecise to say Pandora “sued” ASCAP. The court filing doesn’t allege any sort of malfeasance or breach that you’d ordinarily see in a civil lawsuit. Instead, it is part of the process for rate-setting established under ASCAP’s consent decree.

References

References
1 The sound recording copyright includes all these rights except the right to publicly perform; instead, a sound recording copyright holder only has a narrower right to publicly perform “by means of a digital audio transmission.”
2 These organizations are sometimes also called “performance rights organizations”. The US Copyright Act uses the term “performing rights society.” 17 USC § 101. These organizations fall under a broader umbrella of what are called “collective rights organizations”, “collective management organizations”, or “collective societies.”
3 United States v. ASCAP, 1940-43 Trade Cas. ¶56,104 (SDNY 1941); United States v. Broadcast Music, Inc., 1940-43 Trade Cas. ¶56,096 (ED Wisc. 1941).
4 United States v. ASCAP, 1950-51 Trade Cas. ¶62,595 at 63,754 (SDNY 1950).
5 US v ASCAP, Second Amended Final Judgment, No. 41-1395 (WCC) (SDNY June 11, 2001).
6 United States v. Broadcast Music, Inc., 1966 Trade Cas. ¶71,941 (SDNY).
7 United States v. Broadcast Music, Inc., 1996-1 Trade Cas. ¶71,378 (SDNY 1994).
8 Though there are differences between the two decrees, both are broadly the same.
9 Daniel Crane, Bargaining in the Shadow of Rate-Setting Courts, 76 Antitrust Law Journal 307 (2009).
10 Id., citing US v American Optical, 95 F.Supp. 771 (SDNY 1950).
11 See, for example, Arsberry v Illinois, 244 F.3d 558, 562 (7th Cir 2001), noting a “historical antipathy to rate setting by courts, deemed a task they are inherently unsuited to perform competently”; In re Coordinated Pretrial Proceedings in Petroleum Products Antitrust Litigation, 906 F.2d 432, 445 (9th Cir 1990), “The federal courts generally are unsuited to act as rate-setting commissions.”
12 Laurence R. Helfer, Collective Management of Copyrights and Human Rights: An Uneasy Alliance Revisited, Collective Management of Copyright and Related Rights, 75, 91 (Daniel Gervais (ed.), Kluwer Law Int’l BV 2010), “governments in nearly all countries in which CMOs operate exercise some form of regulatory control over licensing practices to prevent abuse of their dominant positions. The source, extent and enforcement of these regulations vary widely, however. In some countries, copyright laws limit CMO activities. In others, administrative agencies, tribunals or other specialized regulatory bodies monitor CMO activities and adjudicate complaints by licensees. In yet other nations, users seek relief from the courts by filing competition or antitrust claims against CMOs, leading to judicial monitoring of licensing practices in the form of detailed consent decrees”;

Simon Helm, Intellectual Property in Transition Economies: Assessing the Latvian Experience, 14 Fordham Intellectual Property Media & Entertainment Law Journal 119, 201 (2003), “An example is the Copyright Board in Canada. Invested with quasi-judicial powers, the Copyright Board functions as an arbitral tribunal, and its decisions have the effect of superior court judgments. Under the Canadian model, collective rights administrative societies are required to submit an annual tariff, which is then published. The Copyright Board has jurisdiction to receive submissions from interested parties in relation to the proposed tariff and to make any amendments to the tariff that it considers necessary. Canadian law also sets tariffs for wireless broadcasters based upon their advertising revenues. In cases where an individual license cannot be agreed between the collective rights administration society and a user, the Canadian scheme provides for the submission of the dispute to the Copyright Board for resolution.”

By , November 30, 2011.

A funny thing happens when one reads about how “content industries hate technology.” See if you can tell what it is:

Historically, intellectual property rights holders had a tendency to initially complain about the adverse impact of new technologies only to find them later opening up new markets for their products and services. For example, well-known American composer John Philip Sousa testified before Congress about the challenge created by the manufacture and sale of phonograph records:

When I was a boy . . . in front of every house in the summer evenings you would find young people together singing the songs of the day or the old songs. Today you hear these infernal machines going night and day. We will not have a vocal cord left. The vocal cords will be eliminated by a process of evolution, as was the tail of man when he came from the ape”

… Decades after Sousa’s testimony, the late Jack Valenti, the long-time lobbyist for the U.S. movie industry, made the same mistake. In his effort to lobby against the manufacture and distribution of videocassette recorders, he declared that the new device was “to the American film producer and the American public as the Boston strangler [was] to the woman home alone.”

Peter K. Yu, Digital Copyright and Confuzzling Rhetoric, 13 Vanderbilt Journal of Entertainment and Technology Law 881 (2011)


Moving into the 20th century, the claims about technology as a threat to content came fast and furious. The threats in the first decades of the 20th century were the player piano and the gramophone. John Philip Sousa wrote an article, The Menace of Mechanical Music, in which he argued that those infernal devices were a “threat to his livelihood, to the entire body politic, and to ‘musical taste’ itself. . . . The player piano and the gramophone [ ] strip[ ] life from real, human, soulful live performances.”

… By the late 1970s we get to the example that is perhaps the most familiar: the VCR. The free television model, augmented by cable, had been established for some time. Along came a technology that allowed people to copy this freely provided television content and do what they wanted with it. The content industry warned us that the VCR must be stopped. Here is Jack Valenti of the MPAA, speaking to Congress:

[T]he VCR is stripping . . . those markets clean of our profit potential, you are going to have devastation in this marketplace. . . . We are going to bleed and bleed and hemorrhage, unless this Congress at least protects one industry that is able to retrieve a surplus balance of trade and whose total future depends on its protection from the savagery and the ravages of this machine.

If that were not enough, he went on to say, “I say to you that the VCR is to the American film producer and the American public as the Boston strangler is to the woman home alone.”

Mark Lemley, Is the Sky Falling on the Content Industries? 9 Journal on Telecommunications and High Technology Law 125 (2011)


Over 100 years ago, the famous composer John Philip Sousa tried to block two new technologies, the gramophone (phonograph) and the player piano. In 1906, Sousa testified before Congress about his concerns: he “viewed the mechanical reproduction of music as an ominous threat.”

In an article attacking the new technologies, Sousa warned of “a host of other injuries to music . . . by virtue – or rather by vice – of the multiplication of the various music-reproducing machines.”

… In 1976, two movie studios sued Sony Corp. to try to block sales of Sony’s Betamax, a videocassette recorder (VCR or VTR), in probably the most famous example of the content industries’ attempts to block new technology. Overstatements about the supposed effects of the VCR were rampant. As quoted above, Mr. Valenti likened the VCR to the “Boston strangler.”

Viacom v. YouTube, Amicus Brief of Consumer Electronics Association (2nd Cir. 2011)


Copyright owners have greeted every new technology with panic. At the turn of the 20th century, sheet music publishers viewed the player piano, which used copyrighted sheet music in the pianos (and threatened to reduce revenue) with great alarm. John Philip Sousa bemoaned the introduction of the technology, predicting “a marked deterioration in American music and musical taste, an interruption in the musical development of the country, and a host of other injuries to music in its artistic manifestation.”

Eight decades later, Jack Valenti, then the head of the Motion Picture Association of America (MPAA), warned that the market for copyrighted movies would be “decimated, shrunken [and] collapsed” by the VCR, and that “the VCR is to the American film producer and the American public as the Boston strangler is to the woman home alone.”

Viacom v. YouTube, Amicus Brief of Michael Carrier (2nd Cir. 2011)


In the last century or so, which industry has a habit of being hysterical and hyperbolic about copyright issues… and which has a history of being right. Let’s start about a century ago, with John Philip Sousa, the composer. In 1906, he went to Congress to complain about the infernal technology industry and how it was going to ruin music:

These talking machines are going to ruin the artistic development of music in this country. When I was a boy…in front of every house in the summer evenings, you would find young people together singing the songs of the day or old songs. Today you hear these infernal machines going night and day. We will not have a vocal cord left. The vocal cord will be eliminated by a process of evolution, as was the tail of man when he came from the ape.”

… Jump forward a decade or so, and we have the infamous statement of Jack Valenti comparing the VCR to the Boston Strangler:

I say to you that the VCR is to the American film producer and the American public as the Boston strangler is to the woman home alone.

Mike Masnick, A History of Hyperbolic Overreaction to Copyright Issues, TechDirt (Nov. 9, 2011)


Besides, this is just another line like Valenti’s old “Boston Strangler” line. People who don’t know or understand culture or history always blame the new technology for “killing” off the old industry. The reality — as shown time and time again — is that it actually enhances and grows that industry. You see it again and again. The sheet music industry insisted the player piano would kill the music business. John Philip Sousa insisted that the phonograph would kill the music industry, because with it, no one would ever learn to play music or want to hear live music again.

Mike Masnick, What Happens When You Get Two Internet Haters Together? An Interview that Kills Brain Cells, TechDirt (Nov. 2, 2011)


The second reason for the threats to innovation is copyright owners’ panic upon the introduction of new technologies. John Phillip Sousa thought the player piano would lead to “a marked deterioration in American music.” Jack Valenti famously thought the VCR was to the American public as “the Boston strangler is to the woman home alone.”

Michael Carrier, Why Innovation is Under Attack, TechDirt (May 13, 2011)


At the turn of the last century John Philip Sousa argued that the gramophone was a grave threat to musicians. How could musicians earn a living if the public were free to listen to music in our homes?

… In the early 1970’s the Motion picture association argued that the video recorder would make the film and television industry “bleed and bleed and haemorrhage”, their president, Jack Valenti, claimed the VCR was as great a threat to film producers as the Boston strangler was to women home alone.

Conor Mulhern, Making money the only way they know how, conormulhern.com (May 2, 2011)


New technology has always caused great distress for copyright owners, going all the way back to 1903, American composer John Philip Sousa was worried the player pianos would destroy music as they then knew it. After that each new technological advancement which created a new method of transmitting information met fierce opposition from the content industry of the time from the radio, to the cassette tape to Mp3′s its always the same story. Not that all of their concerns were unwarranted or unfair but the rhetoric has at times been laughable. My personal favorite is this gem:

“I say to you that the VCR is to the American film producer and the American public as the Boston Strangler is to the woman home alone.” ~ Jack Valenti, Former President MPAA

t3chjurist, Us, Them and Copyright, techjurist.wordpress.com (Feb. 23, 2011)


Other companies, and their trade associations, instead attempt to avoid change of any sort. To quote Jack Valenti, the past President of the Motion Picture Association of America, in his testimony to the U.S. Congress about Video Cassette Recorders:

I say to you that the VCR is to the American film producer and the American public as the Boston Strangler is to the woman home alone.

… Every Disruptive Technology has caused a reaction like Jack Valenti’s by the Corporations involved. Artists have also fought these new means of production and/or distribution. In a submission to Congress about the new-fangled phonograph John Philip Sousa, the great American Composer and Conductor said:

These talking machines are going to ruin the artistic development of music in this country. When I was a boy…in front of every house in the summer evenings, you would find young people together singing the songs of the day or old songs. Today you hear these infernal machines going night and day. We will not have a vocal cord left. The vocal cord will be eliminated by a process of evolution, as was the tail of man when he came from the ape.

Wayne Borean, An Explanation of my Views on Copyright Part One, madhatter.ca (Sept. 7, 2010)


Home-use VCRs were available as far back as 1963, but didn’t catch on until mass-production dropped the price in the late 1970s. In an almost unrelated note: Shortly afterwards Jack Valenti, head of the MPAA, completely lost his shit.

Appearing before Congress–flecks of spittle presumably slinging from his red, swollen face and melting caustic holes into the floor–he proceeded to proclaim in all seriousness that “…the VCR is to the American film producer and the American public as the Boston strangler is to the woman home alone.”

…Pirated music is hardly a new development. In fact, there have been Metallicas in every age of man, making loud and opinionated asses out of themselves every time somebody accidentally coughs a note they once thought of using in a song. In this case, we’re referring to the “March King” himself, John Philip “Stars And Stripes Forever” Sousa.

In this piece first published in Appleton’s Magazine in 1906, Sousa argues that, “…I myself and every other popular composer are victims of a serious infringement on our clear moral rights to our own work…”

Ralf Bakr, 5 Insane File Sharing Panics from Before the Internet, Cracked (May 7, 2010)


The gramophone (or phonograph) was unleashed upon a music industry that reacted with predictable fear. The composer John Philip Sousa said:

These talking machines are going to ruin the artistic development of music in this country… We will not have a vocal cord left. The vocal cord will be eliminated by a process of evolution, as was the tail of man when he came from the ape.

… The film industry has a similar fear-filled history. In the 1980s, Jack Valenti, president of the Motion Picture Association of America said:

…the VCR is to the American film producer and the American public as the Boston strangler is to the woman home alone.

Jeremy Keith, Fear is the Mind-Killer, Adactio (May 2, 2010)


Content owners have railed against technological change since before Big Content even existed, from John Philip Sousa’s denouncing of the player piano to former Motion Picture Association of America chief Jack Valenti’s famous comparison of the VCR to the Boston Strangler.

Cory Ondrejka, “Big Brother” versus “Little Brother”: Two Possible Media Futures, Futurist Magazine (March 1, 2010)


Hyperbole has characterized rights holder reaction throughout, from John Phillip Sousa complaining to the US Congress in 1906 that player pianos:

“are going to ruin the artistic development of music in this country…The vocal chord will be eliminated by a process of evolution, as was the tail of man when he came from the ape.”

… to Jack Valenti, as President of the Motion Picture Association of America, testifying before the US House of Representatives in 1982 that:

“the VCR is to the American film producer and the American public as the Boston strangler is to the woman home alone”.

Open Rights Group Briefing: Illicit P2P file sharing (2009)


Motion Picture Association of America (MPAA) President Jack Valenti made the following statement to a U.S. Congressional panel in 1982:

I say to you that the VCR is to the American film producer and the American public as the Boston strangler is to the woman home alone.

Yet the reality is that home video viewing, beginning with the VCR and later the DVD player, ultimately came to be the mainstay of movie studio revenues throughout the 1980s, 1990s and into the 2000s. British copyright commentator Tom Watson recently made these insightful observations on a similar phenomenon that occurred much earlier:

In 1906, composer John Phillip Sousa testified before the US Congress that the technological advance of his day would not only “ruin the artistic development of music” but also cause the vocal chord “to be eliminated by a process of evolution”.

Bell, Rogers, Shaw and TELUS, Submission on update to Copyright Act, Copyright Consultations, Canada (2009)


Similar predictions have arisen around every new technology for communicating ideas. John Philip Sousa argued passionately that musical recording would be the end of human singing, and Jack Valenti (then president of the Motion Picture Association of America) compared the video recorder to the Boston Strangler in its anticipated effect on the movie business.

Kevin L. Smith, Books and reading in the Google age, News & Observer (Nov. 30, 2009)


In 1906, famous composer John Philip Sousa took to Appleton’s Magazine to pen an essay decrying the latest piratical threat to his livelihood, to the entire body politic, and to “musical taste” itself. His concern? The player piano and the gramophone, which stripped the life from real, human, soulful live performances. … In 1982, when the movie and music businesses were engaged in a full court press to shut down the hot new VCR, the warnings about its sinister effects made Sousa sound like a wimp.

Chief movie lobbyist Jack Valenti appeared at a Congressional hearing on the VCR and famously went hog-wild. “This is more than a tidal wave. It is more than an avalanche. It is here,” he warned after reciting VCR import statistics.

… One lobbyist (rightly) contended that “the VCR is the greatest friend that the American film producer ever had,” to which Valenti responded, “I say to you that the VCR is to the American film producer and the American public as the Boston strangler is to the woman home alone.”

Nate Anderson, 100 years of Big Content fearing technology — In its own words, Ars Technica (Oct. 11, 2009)


Emerging technology has often appeared as a bad omen to copyright owners. In 1906, three years before the enactment of the 1909 Copyright Act, famed American composer John Philip Sousa expressed his fears over the invention of player pianos when he said, “I foresee a marked deterioration in American music … and a host of other injuries to music in its artistic manifestations, by virtue–or rather by vice–of the multiplication of the various music-reproducing machines… .”

… Following the U.S. Supreme Court’s decision in Universal City Studios v. Sony Corporation of America, Jack Valenti, former-president of the Motion Picture Association of America (MPAA), foresaw the doom of the movie and television industries in the rise of the VCR: “I say to you that the VCR is to the American film producer and the American public as the Boston Strangler is to the woman home alone.”

Marques S. Johnson, Negotiating Digital: XM Satellite Radio, the AHRA, and Keeping Copyright Balanced, 51 Howard Law Journal 397 (2008)


During testimony, MPAA CEO Jack Valenti, in a performance that was worthy of an Oscar, famously said the following:

“the VCR is to the American film producer and the American public as the Boston strangler is to the woman home alone.”

… This was not the first time, or the last, that the entertainment industry has attempted to use the courts in order to eradicate a technology from existence. While the Betamax case has been the most important decision in years, and arguably the most widely known, there have been other cases that were just as significant. The industry has been short-sighted since its infancy.

In 1906, songwriters objected to the release of the player piano. John Philip Sousa, a famous American composer and conductor who was widely known for his various American military marches, had the following to say about the introduction of the player piano:

“I foresee a marked deterioration in American music and musical taste, an interruption in the musical development of the country, and a host of other injuries to music in its artistic manifestations, by virtue — or rather by vice — of the multiplication of the various music-reproducing machines.”

Scott Jarkoff, Embracing File-Sharing is Essential for Industry Survival, Piratpartiet (July 24, 2006)


“I forsee a marked deterioration in American music…and a host of other injuries to music in its artistic manifestations, by virtue—or rather by vice—of the multiplication of the various music-reproducing machines…”

John Philip Sousa on the Player Piano (1906)

“But now we are faced with a new and very troubling assault on our fiscal security, on our very economic life and we are facing it from a thing called the videocassette recorder.”

MPAA on the VCR (1982)

You’ve Heard This Song Before! Consumer Electronics Association advertisement, Roll Call (June, 2006)


“I foresee a market deterioration of American music and musical taste. An interruption of the musical development of this country and a host of other injuries to music and its artistic manifestation by and the virtue who are riding the vice of the multiplication of these various music reproducing machines.”

This was Mitch [Glazier] last week. Just kidding, this was John Philip Sousa in 1904, over a hundred years ago when he came to Congress, asking that it stop the production of these player pianos because they were going to be the death of the music industry. If you look back historically that was the same reaction that the music industry and Hollywood had to music on the radio, television and VCR. I remember the Betamax was to the American movie industry what the Boston Strangler is to the women at home, according to Jack Valenti, TiVo, the MP3 player and so forth.

Progress & Freedom Foundation, The Role of Music Licensing in a Digital Age (Michael Petricone remarks), Progress on Point 13.18 (July 2006)


But the entertainment industry has been crying wolf for a century, ever since John Philip Sousa claimed that the player piano spelled the end of music in America. Each new technology has been attacked as a grave threat to the sanctity of copyright, yet somehow the sanctity of copyright has survived. The Sony case again provides the best illustration of this fact. The Chairman of the Motion Picture Association of America testified before Congress that the motion picture industry would suffer devastating financial losses if the VCR were not strangled at birth. (“[W]e are facing a very new and a very troubling assault on our fiscal security, on our very economic life and we are facing it from a thing called the video cassette recorder and its necessary companion called the blank tape. . . . I say to you that the VCR is to the American film producer and the American public as the Boston strangler is to the woman home alone.”)

MGM v. Grokster, Amicus Brief of National Venture Capital Association (S.Ct. 2005)


When the phonograph hit the US market, conductor and military composer John Philip Sousa claimed in front of Congress that, along with hurting his business, it would deprive us of our ability to speak: “We will not have a vocal chord left. The vocal chord will be eliminated by a process of evolution, as was the tail of man when he came from the ape!” In 1982, Jack Valenti, then spokesman for the MPAA, stood in front of the same body, calling the VCR “the Boston Strangler” of the American film industry, alleging it was quietly killing American filmmakers.

Alex Aylett, Copy That, This Magazine (July 2005)


This is really part of a much longer historical set of fights between new technologies and the entertainment industry, going back at least to the player piano at the dawn of the 20th Century. No less a figure than John Philip Sousa, the famous American composer, said “The player piano will be the end of music in America.” … that’s exactly the mantra they came up with during the fight over the VCR, and Jack Valenti, who was then head of the Motion Picture Studios, famously said that the VCR was to the movie studio as the Boston Strangler was to a woman alone.

The Shape of Film to Come (remarks of Fred von Lohmann), On the Media (April 1, 2005)


Exhibit I-1: Piracy Panics V. Technological Progress: Economic & Moral Catastrophes are Always about to Befall the Entertainment Industry

John Phillip Sousa, “The Menace of Mechanical Music,” Appleton’s Magazine, Vol 8 (1906)

…I foresee a marked deterioration in American music and musical taste, an interruption in the musical development of the country, and a host of other injuries to music in its artistic manifestations, by virtue — or rather by vice — of the multiplication of the various music-reproducing machines…

Jack Valenti, “Home Recording of Copyrighted Works,” Committee on the Judiciary, United States House of Representatives, April 12, 1982

… I say to you that the VCR is to the American film producer and the American public as the Boston strangler is to the woman home alone.

Mark N. Cooper, Time for the Recording Industry to Face the Music: The Political, Social and Economic Benefits of Peer-to-peer Communications Networks, Consumer Federation of America, et al. (March 2005)


In the propaganda campaign that preceded the Betamax case, Jack Valenti, president of the Motion Picture Association of America, declared that the video recorder was ‘to the American film producer and the American public as the Boston strangler is to the woman home alone’. Strange, then, that video rentals went on to become the film industry’s main source of revenue.

Established interests have never much liked innovation. Back in 1906 the composer John Philip Sousa predicted ‘a marked deterioration’ in musical tastes as newfangled gramophones ‘reduce the expression of music to a mathematical system of megaphones, wheels, cogs, disks, cylinders and all manner of revolving things’.

David Rowan, MGM v. Grokster (op-ed), The Times Magazine (March 26, 2005)


Several examples are telling. At the turn of the twentieth century, the invention of the player piano sparked much concern on the part of musical composers. In fact, renowned American composer John Philip Sousa published an editorial in 1906 attacking the player piano, declaring that it represented a threat to copyright owners and, indeed, the future of music in America. Of course, the player piano ultimately gave way to the phonograph, from which the entire modern music industry arose.

More recently, the motion picture industry attacked the video cassette recorder (VCR) as a threat to the future of film. In 1982, Jack Valenti, then-head of the Motion Picture Association of America (MPAA), famously declared, “I say to you that the VCR is to the American film producer and the American public as the Boston strangler is to the woman home alone.”

EFF, Letter to FTC (Jan. 18, 2005)


Jack Valenti, the head of the Motion Pictures Association of America, testified before Congress, and if you’ve seen him before Congress he often looks like this, and he said in 1982 to the Congress the following: “The VCR is to the American film producer and the American public as the Boston strangler (the notorious serial killer) is to the woman home alone.” Now that’s pretty strong rhetoric. But it’s not unprecedented in the history of copyright and technology in this country. When the phonograph was invented we heard the same kind of complaints from the music industry of the time. John Philip Sousa went before the Congress in 1906 and he said this: “These talking machines (meaning phonographs) are going to ruin the artistic development of music in this country. When I was a boy in front of every house in the summer evenings you would find young people together singing. Today you hear these infernal machines going night and day. We will not have a vocal chord left.”

Edward W. Felten, “Rip, Mix, Burn, Sue: Technology, Politics, and the Fight to Control Digital Media” (lecture) (Oct. 12, 2004)


Predictably, the composers and music publishers went nutso. Sousa showed up in Congress to say that:

These talking machines are going to ruin the artistic development of music in this country. When I was a boy…in front of every house in the summer evenings, you would find young people together singing the songs of the day or old songs. Today you hear these infernal machines going night and day. We will not have a vocal chord left. The vocal chord will be eliminated by a process of evolution, as was the tail of man when he came from the ape.

Jack Valenti, the mouthpiece for the motion-picture industry, told Congress in 1982 that the VCR was to the American film industry “as the Boston Strangler is to a woman home alone.”

Cory Doctorow, Microsoft Research DRM talk (June 17, 2004)

Everyone wins when copyright law adapts to new technologies

Did you catch it?

But on a serious note, the myth that “content industries hate technology” fails for several reasons. It requires fabricating a group (“the content industry”), ascribing a broad characteristic to it (“hates technology”), and then pulling together disparate quotes from anyone who has stated a concern over some new technology as proof of the theory.

And, ironically, the myth neglects the fact that in most cases, copyright law in the past adapted to new technologies.

In the case of Sousa, for example, while he admitted at the time that his remarks may have been a bit over the top, his primary concern was that gramophone manufacturers were appropriating his work without compensating him. 1In the essay quoted many times above, Sousa writes “I am quite willing to be reckoned an alarmist”, but “Could anything be more blamable, as a matter of principle, than to take an artist’s composition, reproduce it a thousandfold on their machines, and deny him all participation in the large financial returns, by hiding back of the diaphanous pretense that in the guise of a disk or roll, his composition is not his property?” Just a few years after his essay and testimony, Congress revised the Copyright Act to provide that mechanical reproductions of musical compositions were part of a copyright holder’s exclusive rights. The result was the recording industry — which greatly benefited composers, recording artists, technology manufacturers and the general public.

Similar stories played out with other technologies, like radio 2A series of court decisions in the early 1920s, including M. Witmark & Sons v. L. Bamberger, 291 Fed. 776; Remick & Co. v. American Automobile Accessories, 5 F.2d 411; and Remick & Co. v. General Electric, 16 F.2d 829, solidified in law the proposition that a radio broadcast of a musical composition is a public performance. and cable television. 3The 1976 Copyright Act provided that retransmission of a broadcast by a CATV operator constitutes a public performance; see Capital Cities Cable v. Crisp, 467 US 691, 709 (1984). Again, the law adapted, the creative and technology companies thrived, and the general public and consumers benefited.

In all cases, the opposition is not to new technologies, but to those who think the introduction of a new technology gives them the privilege of misappropriating someone else’s work.

Just something to keep in mind the next time someone trots out Sousa and Valenti to oppose legislation to adapt copyright law to new technology.

References

References
1 In the essay quoted many times above, Sousa writes “I am quite willing to be reckoned an alarmist”, but “Could anything be more blamable, as a matter of principle, than to take an artist’s composition, reproduce it a thousandfold on their machines, and deny him all participation in the large financial returns, by hiding back of the diaphanous pretense that in the guise of a disk or roll, his composition is not his property?”
2 A series of court decisions in the early 1920s, including M. Witmark & Sons v. L. Bamberger, 291 Fed. 776; Remick & Co. v. American Automobile Accessories, 5 F.2d 411; and Remick & Co. v. General Electric, 16 F.2d 829, solidified in law the proposition that a radio broadcast of a musical composition is a public performance.
3 The 1976 Copyright Act provided that retransmission of a broadcast by a CATV operator constitutes a public performance; see Capital Cities Cable v. Crisp, 467 US 691, 709 (1984).
By , October 11, 2011.

It has been established at common law and recognized by our courts that “rules attending property must keep pace with its increase and improvements and must be adapted to every case”, and copyright protection must correspondingly extend.

Though these words were spoken over a century ago, they remain just as relevant today, especially as the US House is expected to introduce a version of the PROTECT IP Act within the next couple of weeks. The bill, which adds narrow, reasonable remedies designed to reduce the financial incentive of websites whose sole purpose is to infringe on the intellectual property of creators and businesses, seeks to keep pace with the increase and improvements of technology.

Opponents of the legislation will no doubt continue to ramp up their criticism of the bill — as a “threat to innovation” or “censorship“ — as it makes it way through Congress. Some will suggest that creators are better off if copyright law remains the same, that they are better off figuring out on their own how to capture some of the tremendous value their work creates for others.

Yet, somewhat ironically, for all the talk of “innovation”, these arguments remain strikingly familiar to ones raised time and again for at least a hundred years.

Copyright and New Technologies

In 1909, Congress passed a major revision of the Copyright Act. Among its provisions was the extension of copyright control to mechanical reproductions. Prior to then, the reproduction of a musical composition onto a mechanical device that could automatically play the song back — a piano roll or a phonograph, for example — was not considered a reproduction under copyright law. 1White-Smith Music Publishing Co. v. Apollo Co., 209 US 1 (1908). Note for later that the attorney for the plaintiffs was Nathan Burkan, the attorneys for the defendants were Albert H. Walker and George W. Pound.

Debate over whether copyright law should encompass mechanical reproduction was contentious. On one side were manufacturers of automatic musical devices, who pushed Congress not to extend copyright law in this area. On the other were musicians and publishers. In December of 1906, the Congressional Committees on Patents heard from both sides.

Nathan Burkan, who was quoted at the beginning of this post, represented the Music Publishers’ Association. At one point, he was responding to the argument that the owners of mechanical music players had “vested rights” to use their technology to reproduce existing songs. This argument is a forerunner of the argument heard today that copyright holders are opposed to innovation and new technology.

You hear multiple variations on this argument, which basically goes like this: Since the law extends to a new technology, or a new use of existing technology, then it is a wholesale attack on the technology itself. 2“The entertainment industry hates new technologies,” Andrew Kantor, It’s the same old song from a short-sighted industry, USA Today, May 26, 2006; “In 1984, the Supreme Court spared Hollywood from its own short-sighted desire to curtail innovation,” Fred von Lohmann, Betamax was a steppingstone, EFF, 2004; “It’s almost a truism in the tech world that copyright owners reflexively oppose new inventions that do (or might) disrupt existing business models,” Nate Anderson, 100 years of Big Content fearing technology — in its own words, Ars Technica, Oct. 11, 2009; “Any time a new service comes along that helps drag the content industries into the present, the industry’s [sic] hit back by trying to kill off or cripple the golden goose,” Mike Masnick, Why does the entertainment industry seek to kill any innovation that’s helping it adapt? TechDirt, April 15, 2011.

But as Burkan points out, there is a difference between technology and the use of technology. Concern about the latter is not an attack on the former. And as Burkan progresses, he notes what is as true then as it is now: copyright and technology are not two competing forces but rather depend on each other. Weakening copyright law to accommodate the interest of tech manufacturers benefits nobody in the long run.

The letters-patent granted to the inventors of these perforated rolls and phonograph records, and improvements thereon, secure to them the right to manufacture contrivances adapted to reproduce sound. That is the extent of the right. It does not carry with it the further right to appropriate the copyrighted musical composition of any composer. There is nothing in the letters patent or in the patent laws or in the Constitution from which these rights emanate that can be construed as granting to the owner of a patent the right to deprive any man of his property or to exploit the intellectual productions of that man without fair compensation. Nor is there anything in the section which permits the composer of a musical composition, copyrighted after the act shall have gone into effect, to appropriate without compensation any device protected by patent. The composer would have no right to combine his composition with any patented invention and put the same on the market without the consent of the owner of the patent. Then, why should the owner of a patent have the right to use a copyrighted composition, without the owner’s consent, in connection with his invention?

… The contention that these patent owners have vested rights in the offspring of the brain of American composers is in violation of every principle of ethics, equity, and natural justice. They would not attempt to urge the contention that if in order to make their patents profitable it was necessary to combine therewith ordinary personal property, they would thereby acquire any rights in any such personal property. The great principle on which the author’s right rests is that it is the fruit or product of his own labor, and that the labor of the faculties of the mind establishes a right of property as sacred as that created by the faculties of the body. A literary man is as much entitled to the product of his labor as any other member of society, and the right to literary property is just as sacred as any other property and is entitled to the same protection that the law throws around the possession and enjoyment of other kinds of property.

This industry devoted to the manufacture of perforated rolls and phonograph records is essentially parasitic. It thrives by exploiting the productions of American composers, their names, and reputations. It exercises no productive effort in the art which it exploits. It does not stimulate original work. It waits until the composer and publisher have created and met a popular demand for a piece of music, through the expenditure of money, time, and labor; then it swoops down upon and appropriates that composition for use upon its machines, to its own unjust enrichment. It acquired great wealth, influence, and power by sponging upon the toil, the work, the talent, and genius of American composers.

And carried away by the success of this iniquity, these manufacturers have become imbued with its righteousness to such a degree that they regard the exploitation of American genius and the appropriation of its creations to their own enrichment as their vested right, and this bill which is to secure to the American composer no more than his just due—the full fruits of his labor—as an assault upon an inviolable right.

… But their selfishness is suicidal. It is a fact shown by a comparison of the industries that with the increase of the sale of their mechanical devices the sale of sheet music decreases. The hope of reward, this great incentive to original work, is thus taken away from the composers by the policy of these manufacturers, and the production of original compositions is discouraged. The inevitable result will be that the composers will refuse to give original compositions to the public for the sake of a copyright protection which will no longer protect. Then will the parasite that kills itself be killed. 3Pp. 222-23.

Piracy is Promotion?

Earlier in the debates, opponents of the mechanical reproduction provisions raised another argument: copyright owners should be thanking them because piano rolls and phonographs are great advertising for sheet music sales. Sound familiar? 4“An artist’s enemy is obscurity, not piracy,” Cory Doctorow, Scourge of the Corporate Pirates, Brian Bethune, Macleans, April 23, 2008; “The sad fact is that The Lost Country has become a pretty obscure work … Digital access to low-use titles through our catalogs will encourage users to discover resources, for study and for entertainment, that they might not have bothered with before,” Keven Smith, An Open Letter to J.R. Salamanca, Scholarly Communications @ Duke, Sept. 16, 2011; “Companies that are cracking down on “piracy” without realizing they may be hurting free promotional activity are doing damage to their own business,” Mike Masnick, Is There a Difference Between Piracy and Promotion? TechDirt, Aug. 10, 2004; “For example, due to file-sharing, people discover a broader range of films than before but cinemas have done nothing to work with this insight,” Magnus Eriksson, Is Online Piracy a Good Thing? CNN, April 17, 2009.

Below is an excerpt from this portion of the hearings. Speaking first is George W. Pound, representing the De Kleist Musical Instrument Manufacturing Company and Rudolph Wurlitzer Company. He had just finished recounting letters he had received from musicians thanking him for recording their songs. Also speaking is Albert H. Walker, who appeared on behalf of “many inventors and of a few manufacturers,” especially the Auto-Music Perforating Company. Finally, John Philip Sousa, when he finally gets the chance to speak, rebuts Pound and Walker’s arguments.

Mr. Pound. We contend, sir, that that position is not well taken, that as a matter of fact every composer in the land and every music publishing house in the land is glad to get the advertisement following from the mechanical reproduction of their music. It is regarded in the trade as the best assistant to the sales of their music of any form of advertising.

… Mr. Sousa. Can I say a word here?

Mr. Pound. It will have to be very brief, and this will be the last interruption that I shall permit.

Mr. Sousa. Mr. Chairman, I can not understand why the passage of this law will interfere with these gentlemen who want to go to the talking machines. If 99 per cent of the composers are willing to give them their product, all right. I can not understand why I should be robbed in that way. It will not hurt you, and if 99 per cent of them give the music to these people, all they will have to do is to pay me. I can not understand how this law will interfere with them, and I am not standing for any publisher. I am standing for John Philip Sousa, and America.

Mr. Walker. The interest the 99 per cent have in the defeat of the bill resides in the fact that they will sell more music if we continue to advertise their business than they will if the Aeolian Company drives us out of business.

Mr. Sousa. I prefer to be the judge of that myself. I want to select the means of advertising my music. 5Pp. 310-312.

References

References
1 White-Smith Music Publishing Co. v. Apollo Co., 209 US 1 (1908). Note for later that the attorney for the plaintiffs was Nathan Burkan, the attorneys for the defendants were Albert H. Walker and George W. Pound.
2 “The entertainment industry hates new technologies,” Andrew Kantor, It’s the same old song from a short-sighted industry, USA Today, May 26, 2006; “In 1984, the Supreme Court spared Hollywood from its own short-sighted desire to curtail innovation,” Fred von Lohmann, Betamax was a steppingstone, EFF, 2004; “It’s almost a truism in the tech world that copyright owners reflexively oppose new inventions that do (or might) disrupt existing business models,” Nate Anderson, 100 years of Big Content fearing technology — in its own words, Ars Technica, Oct. 11, 2009; “Any time a new service comes along that helps drag the content industries into the present, the industry’s [sic] hit back by trying to kill off or cripple the golden goose,” Mike Masnick, Why does the entertainment industry seek to kill any innovation that’s helping it adapt? TechDirt, April 15, 2011.
3 Pp. 222-23.
4 “An artist’s enemy is obscurity, not piracy,” Cory Doctorow, Scourge of the Corporate Pirates, Brian Bethune, Macleans, April 23, 2008; “The sad fact is that The Lost Country has become a pretty obscure work … Digital access to low-use titles through our catalogs will encourage users to discover resources, for study and for entertainment, that they might not have bothered with before,” Keven Smith, An Open Letter to J.R. Salamanca, Scholarly Communications @ Duke, Sept. 16, 2011; “Companies that are cracking down on “piracy” without realizing they may be hurting free promotional activity are doing damage to their own business,” Mike Masnick, Is There a Difference Between Piracy and Promotion? TechDirt, Aug. 10, 2004; “For example, due to file-sharing, people discover a broader range of films than before but cinemas have done nothing to work with this insight,” Magnus Eriksson, Is Online Piracy a Good Thing? CNN, April 17, 2009.
5 Pp. 310-312.
By , October 04, 2011.

The US Supreme Court began its October 2011 term on Monday, a term that many foresee will be exciting and important. That no doubt holds true for copyright law buffs in particular — the Court will be hearing oral arguments in Golan v. Holder on Wednesday.

But the Court has already addressed one case dealing with copyright law. Yesterday, it denied ASCAP’s petition to overturn a Second Circuit decision holding that downloads of a song do not constitute a public performance of the underlying musical composition.

This was not a big surprise.

In the lower courts

ASCAP administers public performance right licenses in the US — it, along with BMI and SESAC, grants licenses to radio and TV stations, physical venues, and internet services that wish to publicly perform musical compositions on behalf of songwriters and composers.

Since 1941, ASCAP has operated according to a consent decree with the United States after the Department of Justice alleged that its blanket licenses violated anti-trust laws. That decree has been amended several times over the past 60 years and currently provides that the Southern District Court of New York acts as a “rate court” to determine license fees when ASCAP and a licensee cannot agree on a reasonable rate. 1ASCAP Second Amended Final Judgment, Sec. IX, June 11, 2001.

This dispute began when AOL, Yahoo, and RealNetworks couldn’t reach such an agreement with ASCAP. During the rate proceeding, the issue of whether a download is a public performance — which would mean any service providing downloads would require a license from ASCAP — arose.

The District Court held that it was not. 2United States v. ASCAP, 485 F.Supp 2d 438 (2007). Drawing on the language of the relevant statutes, case law, and interpretations from agencies like the US Copyright Office, it said that downloads only constitute a reproduction of a musical composition, not a public performance.

ASCAP appealed the decision (and two subsequent decisions determining the method for calculating the fees in question). The Second Circuit affirmed the District Court’s holding regarding downloads. 3United States v. ASCAP, Nos. 09-0539-cv (L), 09-0542-cv (con), 09-0666-cv (xap), 09-0692-cv (xap), 09-1572-cv (xap) (Sept. 28, 2010). It said that “Music is neither recited, rendered, nor played when a recording (electronic or otherwise) is simply delivered to a potential listener.”

ASCAP, pointing to the definition of “publicly” in § 101, argues that a download constitutes a public performance. Section 101 defines “[t]o perform or display a work ‘publicly'” as follows:

(1) to perform or display it at a place open to the public or at any place where a substantial number of persons outside of a normal circle of a family and its social acquaintances is gathered; or (2) to transmit or otherwise communicate a performance or display of the work to a place specified by clause (1) or to the public, by means of any device or process, whether the members of the public capable of receiving the performance or display receive it in the same place or in separate places and at the same time or at different times.

ASCAP argues that downloads fall under clause (2) of this definition because downloads “transmit or otherwise communicate a performance,” namely the initial or underlying performance of the copyrighted work, to the public. We find this argument unavailing. The definition of “publicly” simply defines the circumstances under which a performance will be considered public; it does not define the meaning of “performance.” Moreover, ASCAP’s proposed interpretation misreads the definition of “publicly.” As we concluded in Cartoon Network LP v. CSC Holdings, Inc., “when Congress speaks of transmitting a performance to the public, it refers to the performance created by the act of transmission,” not simply to transmitting a recording of a performance. ASCAP’s alternative interpretation is flawed because, in disaggregating the “transmission” from the simultaneous “performance” and treating the transmission itself as a performance, ASCAP renders superfluous the subsequent “a performance… of the work” as the object of the transmittal.

ASCAP again appealed, this time to the Supreme Court.

At the Supreme Court

In its petition for a writ of certiorari, ASCAP argued that the Second Circuit’s decision improperly narrowed the public performance right, contradicts US obligations under intellectual property treaties, and creates profound implications for the American music industry.

ASCAP’s petition was joined by amici, including music publishers, 4These publishers and publisher associations included the Association of Independent Music Publishers, Church Music Publishers Association, Music Publishers’ Association of the United States, National Music Publishers’ Association, Production Music Association, the Songwriters Guild of America, the Society of Composers and Lyricists, the Recording Academy, the Game Audio Network Guild, and the Nashville Songwriters Association International. BMI, and former US Register of Copyrights Ralph Oman.

The United States argued in its brief that Supreme Court review was unnecessary. It reiterated why it believed the Second Circuit’s holding was correct and noted that no other case contradicted this holding. ASCAP’s claim that the holding violates international agreements, said the US, was also without merit.

As for ASCAP’s argument about the impact of the court’s decision on the music industry, the US said this worry is unfounded:

[D]ownloading music files clearly implicates the authors’ rights to re­produce and distribute copies of those musical works. [ASCAP]’s members are therefore paid each time a copyrighted work is lawfully downloaded. To be sure, a different agent licenses those mechanical rights, but the composer or author ultimately benefits regardless of which agent grants the license.

The Supreme Court was ultimately unconvinced by ASCAP’s petition and declined to take up the case, meaning the Second Circuit’s decision stands.

While ASCAP plays a vital role in standing up for its member songwriters, its legal arguments here were a longshot. The Second Circuit’s decision was a sound one, and the Supreme Court had little reason to revisit it.

References

References
1 ASCAP Second Amended Final Judgment, Sec. IX, June 11, 2001.
2 United States v. ASCAP, 485 F.Supp 2d 438 (2007).
3 United States v. ASCAP, Nos. 09-0539-cv (L), 09-0542-cv (con), 09-0666-cv (xap), 09-0692-cv (xap), 09-1572-cv (xap) (Sept. 28, 2010).
4 These publishers and publisher associations included the Association of Independent Music Publishers, Church Music Publishers Association, Music Publishers’ Association of the United States, National Music Publishers’ Association, Production Music Association, the Songwriters Guild of America, the Society of Composers and Lyricists, the Recording Academy, the Game Audio Network Guild, and the Nashville Songwriters Association International.
By , August 01, 2011.

The latest darling of the digerati is music service Turntable.fm. The site has grown to nearly 400,000 monthly active users (despite still being invite-only) and has raised $7.5 million from investors since it launched just two months ago. Along with countless rave reviews in the blogosphere, it has been covered by Billboard, labelled “the cool kids’ Pandora” by CNN, and called “amazing” by the New York Times.

And it is pretty cool, as I’ve discovered after playing around with it in the last couple weeks. It’s great for sharing music — in the real sense of the word, not in the false “file-sharing” sense — with friends and strangers, discovering new music, or simply as a “traditional” internet radio station that you listen to at work or home.

But is it legal? Several people have already asked the question. As with most questions involving copyright, the answer is not easy, as these answers are typically very fact-specific and depend on interpreting laws that lack bright-line distinctions. The answer isn’t made easier by the fact that the team behind Turntable.fm has remained tight-lipped for the time being.

For those unfamiliar with the site, Billboard’s article provides a good rundown of how it works.

Whether Turntable.fm is legal depends on whether it is licensed to exercise any of the exclusive rights of any copyrighted content.  Recorded music consists of two separate copyrights: a copyright for the underlying musical composition and a copyright for the particular sound recording of the song. Each of these copyrights consist of individual rights — notably, the right to reproduce, the right to distribute, and the right to publicly perform a work.

Public Performance

Streaming a song implicates the public performance right of a musical composition. 1US v. ASCAP, 485 F.Supp.2d 438, 442 (SDNY 2007). Performance Rights Organizations (PROs) — in the US, these include ASCAP, BMI, and SESAC — administer the licensing of public performance rights for nearly all musical compositions — the notable exception being a portion of the catalog of EMI, which recently began administering the public performance rights for “New Media” services itself.

In the past couple weeks, Turntable.fm has inked deals with both ASCAP and BMI. That leaves agreements with SESAC and EMI Publishing for the site to be fully covered, though presumably those are in the works or already on the way based on the site’s efforts to become licensed under the other PROs.

Performance rights for sound recordings are a bit trickier. When sound recordings were first given copyright protection, that protection did not include a right to public performance. However, in 1995, Congress added a narrow performance right to sound recordings via a digital audio transmission. 2Digital Performance Right in Sound Recordings Act, Pub. L. No. 104-39, 109 Stat. 336 (Eff. Feb. 1, 1996). It also included provisions for statutory licensing for certain webcasters, provisions that were amended by the DMCA in 1998.

Currently, noninteractive services are eligible for statutory licensing; interactive services — think on-demand streaming services like Spotify — must negotiate directly with copyright owners for public performance licenses. 317 USC § 114(d)(1) and (d)(2).

The Copyright Act defines an “interactive service” as:

one that enables a member of the public to receive a transmission of a program specially created for the recipient, or on request, a transmission of a particular sound recording, whether or not as part of a program, which is selected by or on behalf of the recipient. The ability of individuals to request that particular sound recordings be performed for reception by the public at large, or in the case of a subscription service, by all subscribers of the service, does not make a service interactive, if the programming on each channel of the service does not substantially consist of sound recordings that are performed within 1 hour of the request or at a time designated by either the transmitting entity or the individual making such request. If an entity offers both interactive and noninteractive services (either concurrently or at different times), the noninteractive component shall not be treated as part of an interactive service. 417 USC § 114(j)(7).

Only one case has been faced with the issue of distinguishing between interactive and noninteractive services. In Arista Records v. Launch Media, the Second Circuit considered whether the webcasting service LAUNCHcast was “interactive” within the meaning of the statute. LAUNCHcast allows users to create custom stations by selecting a genre, artist, or song; the service than generated a custom playlist for the user (I’ve never used LAUNCHcast, but from the description, the service sounds like it operates similarly to Pandora). The plaintiffs argued that this type of service is clearly interactive since the stations are “specially created for the recipient.”

The Second Circuit disagreed with this broad reading of the statute’s language. It turned to Congress’s intent for more clarification, and after a thorough examination of the legislative history, said:

In sum, from the SRA to the DMCA, Congress enacted copyright legislation directed at preventing the diminution in record sales through outright piracy of music or new digital media that offered listeners the ability to select music in such a way that they would forego purchasing records.

Armed with a narrower reading of the statute, the court ultimately concluded that LAUNCHcast was not an “interactive” service “because the webcasting service does not provide sufficient control to users such that playlists are so predictable that users will choose to listen to the webcast in lieu of purchasing music, thereby—in the aggregate—diminishing record sales.”

It appears that Turntable.fm is operating as a noninteractive service. The music on its system is provided through MediaNet, which also assists with licensing through SoundExchange, the organization in charge with administering statutory licensing of digital performance rights for sound recordings.

For a non-DJing listener, the service does appear to be noninteractive in the legal sense. Aside from selecting a room to listen in, a non-DJ listener has no control over the selection of music. The service doesn’t announce the name of upcoming tracks, nor does it allow tracks to be downloaded. It also limits the number of times tracks from the same artist or album can be played within a certain time frame.

But the service may be considered interactive for those users who are DJ-ing, since they do specify the selection of songs to be played. A service can have both noninteractive and interactive components; for Turntable.fm, that may mean that the statutory license covers the streams made to non-DJ listeners while the streams made to DJ-ing users need to be licensed directly with the sound recording copyright owners.

There is evidence that Turntable.fm is working on complying with the law in this area, either by negotiating such a license or making sure the service is noninteractive under the statute for DJ-ing users. For example, when a user is the only one in a room DJ-ing, the song is only streamed to room visitors while the DJ can only hear a preview. This prohibits someone from using the service as a purely on-demand streaming service like Spotify.

Is that enough? Unfortunately for Turntable.fm, there is no clear answer to that question. The line that divides interactive from noninteractive services is unclear, and I think arguments could be made on either side. For example, this passage from a DMCA conference report points out certain features that would separate an interactive service from a noninteractive one:

[A] service would be interactive if it allowed a small number of individuals to request that sound recordings be performed in a program specially created for that group and not available to any individuals outside of that group. In contrast, a service would not be interactive if it merely transmitted to a large number of recipients of the service’s transmissions a program consisting of sound recordings requested by a small number of those listeners. 5H.R. Conf. Rep. No. 105-797, at 87-88 (1998).

Turntable.fm seems to fit more in the latter category than the former — although it does allow users to create “private” rooms. A “private” room might be considered specially created for a small group of people and not available to individuals outside that group — or it might not, because setting a room as “private” doesn’t bar anyone from joining the room, it just prevents that room from being included in the list of rooms that users see on the site; anyone can join the room if they know the link to it.

Bottom line, the interactive/noninteractive distinction is one that can only be fully determined in court. In 2000, the Digital Media Association (DiMA) petitioned the Copyright Office to clarify this distinction via regulation, but the Copyright Office declined. In its response to the petition, the Office said, “Such a determination must be made on a case-by-case basis after the development of a full evidentiary record in accordance with the standards and precepts already set forth in the statute,” and concluded, “In light of the rapidly changing business models emerging in today’s digital marketplace, no rule can accurately draw the line demarcating the limits between an interactive service and a noninteractive service.”

Reproduction and Distribution

Turntable.fm’s catalog of over 11 million songs is provided through MediaNet, and any reproduction or distribution of that content is covered by its agreement with the service. As per that agreement, Turntable.fm doesn’t allow users to download any of the songs — and in fact appears to be taking affirmative steps to ensure that continues to be true.

The site also allows users to upload songs to the service. The DMCA shields service providers from any infringement that arises by reason of storage at the direction of a user. 617 USC § 512(c). If a user uploads someone else’s song without permission, Turntable.fm must remove it if it has knowledge that it is infringing or receives a takedown notice from the copyright owner.

This feature doesn’t expose Turntable.fm to much risk of liability. Any song that is uploaded isn’t reproduced or distributed further, since the site doesn’t allow downloading. And any public performance of the composition or recording is likely already covered by the blanket licenses the site has in place.

Bottom Line

A few weeks ago, Turntable.fm blocked use of its site from non-US users. Currently, the licenses it does have in place probably extend only to the US. These licenses almost fully cover the site’s use of copyrighted content — Turntable.fm may need to negotiate directly with sound recording owners for public performances received by DJing users depending on whether it is considered an interactive webcaster for these users.

What’s encouraging is that the site owners appear to be working on building a legally-compliant music service from the start. Often, copyright critics try to build a false wedge between content and technology companies. But Turntable.fm shows that it’s possible for a start-up to build an exciting and innovative service that respects copyright. Such services are exciting because they represent sustainable business models that benefit everyone — creators, entrepreneurs, and consumers.

References

References
1 US v. ASCAP, 485 F.Supp.2d 438, 442 (SDNY 2007).
2 Digital Performance Right in Sound Recordings Act, Pub. L. No. 104-39, 109 Stat. 336 (Eff. Feb. 1, 1996).
3 17 USC § 114(d)(1) and (d)(2).
4 17 USC § 114(j)(7).
5 H.R. Conf. Rep. No. 105-797, at 87-88 (1998).
6 17 USC § 512(c).