An ASCAP Political Action Committee fundraising letter that seeks to vilify advocacy positions of organizations like Creative Commons has been circulating the Web. As I noted in a separate story, it’s not exactly news that ASCAP has taken issue with the licenses Creative Commons advocates. Now, however, ASCAP’s legislative advocacy arm also argues in the letter that the advocacy organization Electronic Frontier Foundation is also an enemy of artists getting paid. The EFF hasn’t made a public statement about the issue, but in a response to CDM, an EFF spokeperson says the letter “mischaracterizes” her organization.

“They imply in that letter that the EFF don’t want artists to get paid for their work,” says Rebecca Jeschke, EFF spokesperson. “For years, we’ve had a proposal for Voluntary Collective Licensing,” she says, a scheme by which users of file sharing services could contribute to funds for artists. She says the EFF has been working on the issue since 2003. “We’re interested in making sure that there’s a balance, that copyright respects the rights of the creators but also innovators and speakers, and that [the doctrine of] fair use rights [a provision of US Copyright Law] are respected.”

For more on EFF’s proposals on voluntary collective licensing, see the organization’s 2008 white paper. Ironically, the proposal explicitly cites ASCAP and similar organizations as their model for how file sharing collections could work:
A Better Way Forward: Voluntary Collective Licensing of Music File Sharing

The Precedent: Broadcast Radio
It has been done before.

By voluntarily creating collecting societies like ASCAP, BMI and SESAC, songwriters brought broadcast radio in from the copyright cold in the first half of the 20th century.

What would cause ASCAP to lash out at EFF in the first place? While the EFF advocates on a number of issues unrelated to ASCAP, including privacy, government transparency, and free speech, it conflicts with some ASCAP positions in some of its recent intellectual property work. For instance, in regards to the case of United States of America versus ASCAP, EFF has criticized ASCAP in court battles over whether mobile phone ringtones should be licensed as performances, and thus subject to performing royalty collections. In legal analysis on EFF’s website last year, intellectual property lawyer Fred von Lohmann described ASCAP in harsh terms:

ASCAP (the same folks who went after Girl Scouts for singing around a campfire) appears to believe that every time your musical ringtone rings in public, you’re violating copyright law by “publicly performing” it without a license. This will doubtless come as a shock to the millions of Americans who have legitimately purchased musical ringtones, contributing millions to the music industry’s bottom line. Are we each liable for statutory damages (say, $80,000) if we forget to silence our phones in a restaurant?

ASCAP Wants To Be Paid When Your Phone Rings [EFF Deeplinks]

There’s no evidence I could find that any EFF position is advocating that music “should be free,” and ASCAP isn’t clear in the letter about either what EFF policies it opposes, or even what the legislative agenda ASCAP themselves are advocating – and for which they want money. ASCAP’s legislative site is also vague, with a link to a legislative timeline that’s now 12 years out of date, before the popularity of MP3s, Napster, iTunes, iPods, and so on. Legislative recommendations made in March to the US government range from the finer points of international trade policy and enforcement in countries of China to ASCAP talking about their anti-piracy mascot for 10-17-year-old kids, skateboard-wielding “Donny the Downloader.”

ASCAP had not yet responded to CDM’s request for comment; I will follow up with them. ASCAP does, however, have a record of a advocating tougher intellectual property enforcement, including harsher penalties and monitoring.

EFF policy is clearer, however: mandatory monitoring and penalties for Internet Service Providers and mass lawsuits don’t work, says Jeschke. And, she says, that means they also don’t work for artists. “The way, for example, the RIAA has [litigated] in the name of protecting copyright hasn’t really gotten anybody paid. They gave up their lawsuit scheme. The lawsuit campaign just kept going but file sharing continued unabated.”

The EFF is arguing Wednesday in federal court against mass lawsuits. Despite the fact that the music industry dropped the approach, filmmakers of movies like “The Hurt Locker” are now going the same route:
EFF Argues Against Mass Copyright Infringement Lawsuits in Wednesday Hearing: Predatory Suits Improperly Lump Thousands of Defendants Together

Monitoring ISPs and blocking peer-to-peer file sharing, as a recent call from a number of advocacy organizations including ASCAP advocates, is also problematic, she says. When it comes to ISP monitoring, “There are clearly privacy implications for lots of people, in addition to price implications, if ISPs need to step up their enforcement.” Even worse, she says, are policies that would take away users’ Internet access if they are deemed guilty of infringement. “Most of these three strikes policies are three accusations — not three trials where you’re found guilty of infringement. People get caught in that dragnet all the time. Taking away someone’s internet access is a really big thing, and it shouldn’t happen based on three strikes.”

Since even Jeschke acknowledges that music file sharing continues, though, what about artist income? If enforcement isn’t the answer, what is? Voluntary collective licensing is still the EFF’s prescription, says Jeschke. “There will always be some new technology,” she says. “Instead of trying to put fingers in the dam and styming innovation, we need to find ways of getting artists paid.”

In doing so, though, so long as ASCAP sees the EFF as “Copyleft” advocates who only want “free music,” and EFF analysts see ASCAP as the organization confronting Girl Scouts, it’s hard to see these two organizations collaborating on solutions any time soon.

An ASCAP legislative fundraising letter revealed last week that the American performing rights organization is invoking fears of the Electronic Frontier Foundation, Public Knowledge, and Creative Commons in order to raise money. ASCAP appears to be repeating, now in the more heated language of fundraising, arguments it has had with the Creative Commons license in the past. For its part, Creative Commons insists most of its licenses don’t preclude performing rights bodies like ASCAP from collecting funds.

In the letter, sent on behalf of ASCAP’s Political Action Committee (PAC), the ASCAP Legislative Fund for the Arts, the PAC argues to its members that that these organizations undermine the value of music:

Many forces including Creative Commons, Public Knowledge, Electronic Frontier Foundation and technology companies with deep pockets are mobilizing to promote “Copyleft” in order to undermine our “Copyright.” They say they are advocates of consumer rights, but the truth in these groups simply do not want to pay for the use of our music. Their mission is to spread the word that our music should be free.

This is why your help now is vital. We fear that our opponents are influencing Congress against the interests of music creators. If their views are allowed to gain strength, music creators will find it harder and harder to make a living as traditional media shifts to online and wireless services. We all know what will happen next: the music will dry up, and the ultimate loser will be the music consumer.

Attacks on Creative Commons by ASCAP are nothing new. The organization argued in a 2007 essay (and subsequent report) that elements of the license, which is applied to copyrighted works, meant “artists should give up all or some of their rights.” As noted in a rebuttal by Creative Commons’ Laurence Lessig, some of those claims were incorrect. Among other items, ASCAP said that the “licenses ask creators to waive the ability to collect royalties,” which isn’t true of the non-commercial CC licenses.

The claims in the fundraising letter were more bluntly inaccurate. Creative Commons’ licenses are all built on copyright, and as non-exclusive licenses, they do not in any way prevent artists from being paid for music. They don’t even, as the organization observed three years ago, preclude ASCAP license collection – at least not on works licensed with the non-commercial provision.

Creative Commons licenses do reserve fewer rights for the creator, by definition. All the licenses currently in use include provisions to allow works to be freely distributed via peer-to-peer file services, and depending on the license chosen, may open up other possibilities for use and remixing. But nowhere does the letter acknowledge that an artist must choose to license their work; unlike Copyright, CC licenses are not automatic, nor is the CC organization advocating that they should be. Creative Commons spokespeople have previously told CDM that they aren’t even suggesting that CC licenses are the right choice for everyone in every circumstance. As advocates of their own license, on the other hand, they have explicitly said that their hope is that the license will help artists make money, not that all music “should be free.”

The blog ZeroPaid covered the initial controversy and criticized ASCAP’s take on Creative Commons as an attack on creator choice:

Creative Commons is a middle-of-the-road approach when it comes to copyright and enables creators to tell consumers, in plain language, what they can and cannot do with their content. In short, it’s an option for artists. Any attack on Creative Commons is an attack on an artists right to choose what they feel is appropriate for their chosen distribution channel.

ASCAP Declares War on Free Culture

Creative Commons responded on the same site:
Creative Commons Responds to ASCAP

Additional coverage:
ASCAP Claiming That Creative Commons Must Be Stopped; Apparently They Don’t Actually Believe In Artist Freedom [Techdirt]

ArtsJournal blog Mind the Gap observes that the fictional characters on Glee are in conflict with current US Copyright Law, and expresses surprise that the black-and-white claims of ASCAP’s fundraising letter would target the EFF, Creative Commons, and Public Knowledge. He asks if any card-carrying, royalty check-cashing ASCAP members would share how they feel, and they do – largely to express frustration with ASCAP.
The Right Balance on Copying [Mind the Gap]

ASCAP membership dues can go toward advocacy; only the ASCAP Foundation is a 501c3 charitable organization; the latter supports education and talent development. I’m curious, then, what royalty-check cashing ASCAP members think of these issues, as well.

Thanks to Jason Phoenix for the tip, and incidentally to my friend Mike Rugnetta, whom I was surprised to see pop up in the stories. (Internet: population, one dozen?)

As music listening takes new forms, that builds new business models. But who calls the shots? Who gets to play, and who reaps the benefits? One immediate danger is that major label deals will dominate as outlets vie for position. Online outlets like MySpace have started to look a bit like the same-old, same-old world of major labels and big deals. “Indie” music sometimes makes an appearance, but nearly always in the form of signed artists and often in the shadow of the majors. Unsigned artists can get onboard, but the playing field often isn’t level – and while majors negotiate lucrative deals for their music, unsigned artists and indies have to give theirs away for free. At the other end of the spectrum, unsigned artists often don’t get paid by services that benefit from their work (like MySpace).

That’s why Last.fm’s announcement yesterday was a potential bombshell. Now fully available after months of development, the Artist Royalty Program will pay artists royalties on plays directly – no label required. Unsigned and independent artists can sign up to earn royalties from on-demand plays and Last.fm’s streaming radio.

Last.fm Artist Royalty Program (last.fm/uploadmusic)

Royalties 101

To fully understand what that means, let’s back up and talk about where royalties come from in on-demand online music. This is entirely separate from downloadable music – that’s pretty straightforward. If you, for instance, sell a track on your band’s website for 50 cents, people pay 50 cents, own the track, and you get 50 cents. If you sell it through another vendor, then you get a slice of the sales pie.

But on-demand, streaming music, via radio stations or elsewhere, works differently. Since the days of radio, broadcasters have wanted broader access to music. Obviously, if they had to negotiate rights individually for each track, they couldn’t exist. So the solution has always been a system of blanket royalties. In the online space, there are two kinds of royalties, coming from two different licenses. Here’s the simplified version (lawyers, feel free to clarify):

1. A license for the recording – the “statutory license.” These fees are set by the Copyright Royalty Board and collected by SoundExchange. It’s called “statutory” because webcasters don’t need your explicit permission to broadcast music. They’re paid to the owner of the recording. If you’re a signed artist, that’s your label.

2. A license for the “performance rights” of the copyrighted work itself. These fees are negotiated with performing rights organizations like ASCAP, BMI, and SESAC.

That sounds odd (Last.fm isn’t “performing”), but it makes more sense if you think about the actual music. There’s the recording of the music, and the “work” itself. So, for instance, you might record a cover of a song. There’s the songwriter, and the artist recording the work; they may not be the same person.

If you’ve written and recorded your own song, you own both of these rights. You might sign with a label and give them the recording rights, but either way, the basis remains the ownership of the recording and the musical work.

So where does ARP fit in?

First, regardless of whether you’re part of ARP or not, you’ll always receive the performing rights if you’re the writer of your musical material. That’s why it makes sense to join an organization like ASCAP if you’ve ever produced anything; unless you do nothing but cover other people’s music, they’re there for you. They’re not the RIAA – they represent writers and publishers. In fact, even if you release your music under a Creative Commons non-commercial license, you are eligible to receive royalty payments collected by these bodies. (That’s the topic of an upcoming article.) If you join ARP, you’ll continue to receive income for this music.

What ARP does is to provide additional income for unsigned artists. A spokesperson for CBS Interactive (parent of Last.fm) tells CDM:

If you participate in the ARP, you should not be signed up with a recording rights society. In effect, Last.fm is cutting out the middle man here by paying the artist directly without going via the collection society. Writers benefit from the publishing rights royalties that Last.fm pays to the publishing rights societies. ARP is for recording rights only.

Who Benefits from ARP?

Here’s where ARP makes a difference. Previously, the system for the artist was to go get a label, and then get that label to collect royalties on the recording. The label, in turn, had to go to SoundExchange, formerly part of the RIAA but now an independent organization, to get the money. Result: fees get set by a board of judges chosen by the Copyright Office (the Copyright Royalty Board), and you’ve got multiple middle … men, actually.

Under the ARP, you go to Last.fm, and Last.fm pays you. You upload the music where you want it to go. And, via Last.fm’s community pages, you actually have some tools for your music:

Last.fm for labels and artists

In addition to royalties, that includes stats, event management, and the ability to connect with fans. And the other thing that’s interesting about this whole system is that both parties essentially have to be happy. Artists have to be getting value from Last.fm’s service, and royalties that make sense for them. Last.fm can then, in turn, build an ad-based revenue model that works for them as a business. That’s a far cry from a giant battle between the recording industry and large performers’ organizations in front of a group of judges. It’s new, so we’ll have to see how it works, but it’s nothing if not appealing.

(See also a similar announcement from imeem, though that one required working through SNOCAP for distribution, and comes from, arguably, a less popular service. I also think some of Last.fm’s unique tools for data collection and fan management make it more interesting than imeem. But this is all the more significant if other sites do the same thing in the future.)

ARP for Labels, Getting Paid

The ARP system isn’t limited to artists, either. New labels could embrace the system. Again, a Last.fm spokesperson clarified for CDM:

A label can participate in the ARP Program IF they own the WORLDWIDE rights to the content and have NOT signed up with any collection societies.  (Basically only startup labels that aren’t collecting any royalties would be interested in participating in the program since they’d only receive revenue from Last.fm in that case)

One other simple upshot of all of this is that people actually get paid. That’s not the case with MySpace. As Eliot Van Buskirk writes for Wired’s Listening Post:

We’ve had a bone to pick with MySpace about this for a while, because it plans to compensate major labels with a share of ad revenue without similarly compensating indie labels, unsigned artists, or possibly even the artists signed to them.

The headline says it all:

Last.fm Compensates Artists, Unlike Some People We Know [Wired.com Listening Post]

It’s well worth the full read. Eliot notes that even Last.fm doesn’t maintain the amount of money will be huge, partly because online streaming is still growing gradually (though I think listening habits will continue to grow). The money is coming from ads that appear with the streams. But Wired notes over 450,000 tracks are available on Last.fm as part of the Artist Royalty Program. And they also observe that, unlike MySpace, indie artists aren’t left in the dark, and unlike almost everyone, payouts are transparent – you can actually monitor what you’re earning.

Ultimately, I think that’s the bottom line: Last.fm is actually paying people. And I don’t mean to make an argument against labels. On the contrary, ARP is a tool many artists will likely use while looking for a label – alongside other useful tools (some arguably more valuable than direct revenue) provided by the service. The one question I do have, though, is whether new upstart labels might forgo the complex recording collection process entirely and start to use services like this directly. That would allow them to continue to fill the business and promotion roles labels have always provided, which artists and writers often can’t handle on their own. But it could be the first glimpse of a new set of models in which music creators, publishers, and labels deal with online business directly, rather than dealing with a middle man.

Update: Labels not so happy

I missed this: Merlin, one of the aforementioned rights bodies representing the labels (12,000 independent labels total, controlling more music than EMI) has protested the ARP license:

Merlin Opposes Last.fm’s Artist Royalty Program [Wired.com Listening Post]

The grounds: no retroactive license fees, a breakdown in negotiations with Merlin, and vague licensing terms. Now, I’m not sure on any of those points – in particular, Merlin’s negotiations should theoretically be independent of ARP to begin with; it explicitly excluded people who have signed with labels who are part of separate negotiations. If you’re an independent artist, it doesn’t really matter what Merlin thinks or even what they deem “illegal” – particularly if you’re uploading and licensing your own music, which is presumed by the ARP deal.

But the main thrust of this argument is that past Last.fm plays were illegal and unlicensed.

Last.fm’s response is, basically, ARP is about indie artists, not Merlin. Merlin’s banner says “representing the rights of independent record labels worldwide,” by which they mean, of course, their members, not necessarily anyone else.

But Does it Add Up to Anything?

The big problem is, streaming rates in general are a tiny fraction of a cent per play. If Last.fm achieves greater volume, that could be good news for artists. Until, then, though, this is largely symbolic. Further discussion:

Fine Print: What Do Royalty Rates Actually Pay?