by Miriam Rainsford:
A Musician's Take on File Sharing, DRM, and Copyleft Licensing

Advertisement In a recent weblog, Derrick Story wrote "I'm tired of listening to the RIAA. I want to hear from the musicians."

We hear so much in the press about the RIAA's stance against "music piracy" and the attempts of major labels to provide legitimate music download services, while making a determined effort to deter those who wish to share music on peer-to-peer networks. Story is all too familiar with the current stalemate between consumers and the RIAA, but raises the point that "I don't know what the actual artists are thinking. They are the ones who create the content that everyone else is arguing about."

Musicians are often unwilling to speak out against the tight constraints of their record labels, afraid of biting the hand that feeds. But an increasing number of artists are embracing the changes in digital technology as a potential revolution which may free them from the shackles of the commercial record industry. As an independent, computer-based composer whose work deals directly with fair use rights in an interactive world, I will dare to venture an answer.

Yes, we have indeed heard enough from the RIAA, a conglomerate of the five major record labels who claim to speak on behalf of their artists, yet are out of touch with musicians' need and interests. I would suggest that instead, financial interests, and a fear of adapting to changes in technology are the primary motivation behind their impassioned speeches against "piracy" and their pursuit of multi-million dollar lawsuits against students running private, non-profit file sharing networks. Differing Opinions About Music Sharing and Sales

The issue of peer-to-peer (P2P) file sharing and music downloads gives rise to strong and differing opinions from record company executives, musicians, and the listening public. A conclusive study of the impact of P2P on the record industry proves difficult to obtain, and each side has manipulated sales figures to their advantage: while the RIAA present a worst-case scenario, others demonstrate that P2P does in fact encourage sales by introducing listeners to new material which is then purchased in CD format.

The economist Stan Liebowitz, hitherto supportive of the notion that P2P has no impact on the record industry, released a controversial paper (.pdf download) last week demonstrating that there is some negative effect, although difficult to establish due to the multitude of other factors.

These include changes in musical taste, the death of the CD single, the introduction of new formats (including authorised mp3 sales), and lower numbers of CD releases due to the current economic recession. Liebowitz's study should also be viewed as somewhat inconclusive as it relies purely on sales figures. It is noteworthy that he has neglected to survey actual public opinion as to why their purchasing habits may have changed.

However, regardless of one's position either for or against P2P, it's clear that file sharing has indeed proved a direct threat to the establishment, as it decentralises control. Peter Drahos, in his book Information Feudalism supports these assertions: "the threat was not so much to entire industries as to individual players who did not want to lose their position of dominance. These players turned to copyright law in the hope of finding immunity from competition and the uncertainties of technological change." Digital Rights Management -- Overkill for Users

And if the major players would have it, their reassertion of control would take the form of Digital Rights Management (DRM) technology embedded in every computer, CD or DVD player, car radio or mobile device, providing an extreme means of control over any attempt to share music. DRM, whether in software or hardware form, is impossible to employ without some level of infringement of the user's civil liberties. Whether this is simply a matter of denying fair use rights, or delving deeper into setups such as TCPA/Palladium which entertain the possibility of remote data-mining, the risks to privacy are very real. When combined with anti-circumvention legislation, this results in a situation where the terms of copyright law are no longer defined by the Government but by the publisher.

As a musician I find the notion of using DRM technology abhorrent -- not only because of the risk that my works could be locked up indefinitely by technological means, despite my signing a non-exclusive distribution contract. Under anti-circumvention laws such as the DMCA and the forthcoming EUCD, it could well prove impossible for me to share my own work with my friends, or to distribute DRM-controlled content to another publisher.

But aside from the legal and practical aspects, I believe DRM to be against the spirit of music-making. Music is made for enjoyment -- and it is very difficult to create music without an atmosphere of freedom. Musicians just want to be free to create, without being concerned over having their music -- or the tools they use to make music - tied down or controlled by devices which may well have detrimental effects on audio quality. Perhaps the reason Apple has been so notoriously silent on the topic of DRM is that the Mac OS dominates the creative market. To implement DRM on a Mac platform would risk alienating their primary customers in the pro audio sector.

I believe there exists a better alternative to DRM and technological methods of control, in the form of copyleft licensing. Copyleft is the permission to redistribute which forms the essence of the Free Software and Open Source movements. By adapting this principle to suit creative works, musicians have a means to license the sharing of their works without unnecessary technical constraint. The EFF's Open Audio License and Larry Lessig's Creative Commons project are examples of the practical application of copyleft principles in the arts, which musicians may easily utilise without the need for specialist legal knowledge. File Sharing and Copyleft Licensing

As a struggling composer myself, I would like to assert the case that file sharing promotes, rather than takes value from my music. If I permit my audience to copy my works -- which, let's face it, they are going to do anyway, whether I like it or not -- then DRM technology becomes unnecessary. Copyleft licensing decriminalises sharing, whereas DRM makes criminals out of our audience -- and indeed, out of us as the musicians. It would be impossible for me to compose my heavily sample-based work without access to file-sharing networks. The job would be tedious and time-consuming, and indeed sometimes nigh on impossible, as many of the samples that I collect are from rare mp3 files.

There is no criminal activity involved in taking samples for the purpose of parody or artistic criticism, as this qualifies as fair dealing under UK law. Under copyleft licensing, there would be no need for me worry about the methods I use to collect my samples from the internet, as redistribution is permitted. One could even form a repository of copylefted works, which could be employed by musicians working with samples, web designers seeking sound effects and perhaps even teachers who might wish to use a piece in a drama class. Darren Landrum has begun work towards an Open Music Resource Library which would offer such services.

Kris "Thrash" Weston, formerly of The Orb, has turned to using copyleft licensing in his new venture, bLiP Records, where he distributes his releases online via his website. Weston also operates servers on all the major P2P networks, releasing the entire contents of bLiP's premiere album, "WTF? - The Madonna Remix Project," in mp3 format under an open audio license. This may seem a risky move for a new business, but Weston believes in the power of file sharing as viral communication, promoting his new recordings and providing a form of free advertising -- very welcome to a new company with little money to spare.

Weston terms copyleft "a karmic tax", as it establishes a level playing field; those who feel they will lose out through permitting reproduction are the ones at the top of the tree: "it only affects the people making too much in the first place". Having seen the ugliness of the music business from the inside during his days with The Orb, he has chosen copyleft as a means of fighting back against the institutionalisation of music: "... if only purely to stop the onset of the DMCA and the pointless bodies that do little for the struggling artist and much for the old boy's club".

One difficulty which bLiP records encountered in releasing the Madonna Remix Project album was that MCPS (UK Mechanical Copyright Protection Society) licensing is at present incompatible with copyleft licensing. Weston wished to draft his own license which would permit his customers to enjoy sharing mp3s of the album. When he approached the MCPS, their response was that a copyleft license would be "inappropriate."

On further enquiry it seems that, as an artist signs an exclusive license to the MCPS for royalty collection, the MCPS are then unwilling to extend this license to include file sharing. This is somewhat understandable when one considers that the MCPS takes an 8.5 percent cut from every album or digital distribution in the United Kingdom. The MCPS are willing for their members to use copyleft licensing as long as they sign a waiver for royalty collection. But what made Weston's job difficult is that, under UK law, it is illegal to press an album without an MCPS license. And an album license will not be granted by the MCPS if the album uses copyleft material.

So yet again, we find that musicians who wish to work independently of the system are being locked out by a monopoly operated by the MCPS, who receive the major part of their commission through royalty collection for the Big Five record labels. This makes it hard to believe that the MCPS would be unbiased in their service towards musicians, even though it would take little effort for the MCPS to implement alternative forms of licensing. Julian Midgely, Chairman of the UK Campaign for Digital Rights, commented on the situation: "From the experience of bLiP Records, it appears that the British system for music publishing is heavily geared towards dissuading musicians from releasing their music under open licences. We can see no adequate justification for this, and will be investigating further."

Kevin Marks' mediAgora presents a potential solution to this problem. mediAgora is a business model for internet-based distribution, designed to work within a P2P framework. mediAgora supports Creative Commons and other copyleft licenses, and permits and actively encourages redistribution by rewarding those who share files as virtual "promoters." Those who share files on their P2P systems are required to pay a fee to purchase the files, but are then rewarded when another listener buys and shares the music from their server.

A pre-determined percentage from all these fees is returned to the artist, who takes the place of the record company middleman and receives around 70 percent of royalties. Although it may seem a complex system, it is designed to fit easily into present file sharing networks. Marks is convinced that Digital Rights Management is unnecessary, and destroys the value of the work. He believes that the best way to encourage fair payment for an artist is to make legitimate systems easier to use than the unauthorised networks: "If you lock up your work with some scheme that requires a password to be entered and a network connection to authorise, or one that sets a time limit after which it will destroy itself, or even just one that prevents editing and copying, your customers will value it less, and be less likely to pay for it."

The success of Apple's recent venture with EMI indeed demonstrates the willingness of customers to purchase downloadable files when the system is easy to use and integrates neatly into their existing software to provide a high quality service that can also be shared across a network. While still hampered by some DRM constraints, the openness of EMI in permitting a certain level of copying and streaming is noteworthy in demonstrating a more creative outlook. Final Thoughts

As musicians, we have a natural tendency to turn any situation to creative advantage -- but our attempts are being frustrated by those at the top, who don't wish to lose their increasingly unstable monopoly over the production of music. William Gibson, in a speech at the Director's Guild to America, compared the evolving situation in digital distribution to the Mediaeval feudal system, with the record companies as our patrons, feeding off our hard labour. We as musicians are tired of being subject to the whims of middlemen, who take a greater cut from our earnings than is reasonable. Like the mediaeval peasants, we are seeking change and revolution - but when musicians revolt, they do so with creative flair. We are exploring solutions such as mediAgora and copyleft licensing as a means by which we can return the balance of power to where it rightly belongs, with those who create the music.

Miriam Rainsford is a composer, singer and songwriter in classical, electroacoustic and underground dance music.



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www.iriXx.org .::.

www.copyleftmedia.org.uk .::.

Miriam is running the UK version of our plan. Read her site. Get to know her stuff.

That sucks. Having to have some special organazation licence albums. I guess thats one advantage to living in the US.

The MCPS? The USA equivalent is the Harry Fox Agency. Both MCPS and Harry Fox collect mechanical royalties from record labels on behalf of publishers (ie, the copyright holders). If it wasn't for the MCPS, the artist would probably never get a dime from the record labels. Of course, this only applies to artists who know well enough never to sell the copyrights to their songs. All the countries have an equivalent to the MCPS and Harry Fox, and they collect from all types of record labels, major and indies. In Japan the equivalent agency is called JASROC...

Harry Fox collects mechanical royalties from the labels that release my songs in the USA territory. It works like this:

The record label is obliged to pay the statutory rate for every song on my album (the label caps the number of payable songs to 10 songs, per my contract with them). The statutory rate this year is currently 8 cents song for every song. For long songs, the rate is even higher. For a ten-song album, I thus get 80 cents for every CD and record pressed. Not sold, but PRESSED. A VERY nice piece of change. It is arguably the biggest and most reliable source of revenue that a musician has.

Harry Fox has the time and money to audit the labels and make sure that I'm not being defrauded on this loot. They do this very nicely, in return for a 6% commission. They pay me out on a quarterly basis.

On the negative side, the USA and Canada are the only countries in the world that work via this ass-backwards statutory rate shizzy, which is kind of complicated, and actually puts record labels at a disadvantage. The other countries work on a percentage of the PPD (price per dealer). The difference between these two systems is to blame for what could otherwise be established as a more streamlined global music industry. But, not to complain, it does fairly well. The UK mechanical royalty system works as follows:

The record labels in UK are obliged to register their releases to MCPS prior to pressing. They must establish the PPD or Price Per Dealer, and pay a royalty of 12.5% to the MCPS who collects on behalf of the copyright holder. There are two ways for a label to be given a license to press by the MCPS; they establish themselves as either AP1 or AP2 labels. AP1 labels are typically majors who pay big fees and operate under certain constraints such that they don't have to pay MCPS until after the record is pressed. The AP2 labels consist of everyone else, who must pay before they press, but there are exceptions when they are given 30 day invoices. The MCPS gives the label a license, which the label then takes to a pressing plant. They show the license to the plant, hand over the masters, and the plant manufactures the quantity. It's a nice little system except for the obvious problem of bootlegging. Too many times you'll find pressing plants that press on demand without asking to see a license. These presses serve record labels that wish to bypass the MCPS for the obvious reason: they don't pay mechanical royalties.

As a musician and recording artist from the USA, I only wish that the USA system allowed Harry Fox to dog the USA pressing plants like this.

As a USA artist who records for USA labels which then sublicense to UK, here is how I get paid:

Harry Fox collects directly from the label in the USA. For the UK, they turn to their UK affiliates: MCPS. MCPS collects on the UK products, peels off their 12.5%, then hands the balance to Harry Fox. Harry Fox peel off their 6% plus administrative costs for flagging down MCPS, then hand the rest to me, plus the USA-derived money from which they also peeled off their 6%.

There is no UK or USA law that says you have to collect from Harry Fox or the MCPS. You actually have to apply to these organizations to establish a client relationship, and they don't have to take you on. I don't know about the MCPS, but Harry Fox only deals with publishers who are properly registered with either ASCAP or BMI: they don't deal with songwriters. If you're a songwriter who wants to establish a client relationship with Harry Fox to collect your mechnicals, you'll have to establish yourself as a publishing company, which is easy enough to do and, further more, it's free. I recommend ASCAP, because they have an online database.

Variants of the above process include:

1. invoice the labels directly as your own publisher.
2. sign on with a publisher who collects from Harry Fox and/or MCPS on your behalf ($$).
3. hire an entertainment lawyer who collects from the labels on your behalf ($$$$).

Ms. Raimsford's situation has a little bit of an added dilemma in that she uses samples in her songs. This means she can't own the entire copyright to her music: the people who own the samples rightfully have a claim to a portion of the mechanicals. Good thing too, otherwise people would be getting rich off of sampling the original ideas of others, while the original composer dies in the poorhouse. I think it's fair that both parties get a share; there's much to be said for how Ms. Raimsford is creating income for the composer of the contained sample, and she should also retain a fair share for her original contributions to the newly composed piece. This is how died-down artists who fell off the charts (or never made it in the first place) can continue to make a living from their works.

The digital element of her predicament is, admittedly, lost on me. I have to admit that I don't know how all the countries are handling mechanical royalties on digital files and/or streams. I think it's safe to say that in the case of the Apple Music Store, Apple is acting as a distributor, not a record label. The question is: are they considered distributors of mechanically payable products, or are they simply distributors of non-mechanical 'licenses?'

If mechanical royalties of 8 cents are being collected for every 99 cent song being sold by Apple, it ain't Apple that's paying it; it's the record label that owns the copyright to the masters. I presume that Apple simply takes a distribution fee off the top, as is standard industry practice, before forking over the money to the label. Then the label does or doesn't peel off the 8 cents to the publisher. Then the label takes off whatever deductions the artist agreed they could take off. Then they bounce it down to the artist's account. If the artist didn't take an advance, or if the artist's sales recouped their advance, the artist gets money. Otherwise the artist account tipples a little closer to the green with every sale.

A side issue here is that, obviously, many of the people downloading legally-licensed files from Apple--as well as people downloading unlicensed files from the P2P servers--are burning them to cd and passing them around to friends and family or complete strangers. The labels and the artists and the songwriters don't get any revenue from those copies; mechanical, performing, or artist royalties are effectively bypassed. This is the hole in the digital business model, and it effectively strips the artist of his only reliable source of income: mechanical royalties. But again, this is a side issue...

Does the label pay mechanical royalties in this new business model? It can be negotiated into the contract, sure. It can also go the other way. I've seen all kinds of contracts that change the cashflow. There is no such thing as a standard recording contract. There is no standard for 'fairness.' There are only agreeements which may be negotiated, signed, or rejected.

This is why it's important for artists to think twice before selling the copyright to your songs, even if you're offered a cool million up front. Once you sell the copyright to the label or it's publishing affiliate, you've dispersed your power to control or even track the bottom line to your music. For example, the label may license your song to a french film, and get a 5-figure fee for it; they could feasibly leave this little item off your bi-annual statement and you'd never know the difference. This is because the film production company deals only with the copyright owner; this would have been you, had you not sold it off to the label.

Frankly, as a musican signed to a number of labels in the USA and abroad under various projects, I don't give a damn about artist royalties. That stuff is subject to all kinds of deductions and recoupment clauses that are difficult to negotiate and track, but that's not the big problem. The big problem is that artist royalties are paid on items sold. How are you to REALLY know how many units they sold? You only know what they choose to tell you. There are very few accounting firms and law firms that will audit the label in return for a commission percentage. Those people want hourly wages, period. A record label audit, a cheap one, can take months and cost tens of thousands of dollars. But on the mechanical royalty side:

1. I get paid for the items MANUFACTURED, not sold;
2. There are no deductions;
3. I'm supported by 3rd part organizations who can and will audit the labels for a commission at no cost.

When I realized the recorded music business model, I made the according policy decisions:

1. I try to never use samples of other people's music in my songs.
2. I never sell my copyrights; I established myself as a publisher instead.
3. I consider artist royalties, when and if they appear, as bonuses.
4. Artist advances? I take them only if i need them. I consider them interest-free loans for recording costs, nothing more.
5. Bank only on the mechanical royalties, if that.

The music industry retail merchandising system, as it is currently governed by law, greatly rewards songwriters who compose original music and keep it close to their chests. Publishers benefit second. Record labels benefit third. Artists who simply perform the music of others come last. I bet Michael Jackson makes twice as much money from the Beatles publishing that he brought a few years ago than he does from his own album sales...

> the people who own the samples rightfully have a claim to a portion of the mechanicals.

Define the term 'own', btw? (also see below)

> Good thing too, otherwise people would be getting rich off of sampling the original ideas of others,
> while the original composer dies in the poorhouse.

Hah. Rich.

The thing is, "tracking" and "defending" all those tiny "rights" (which can be claimed on the equivalents of four-liners) can (and will) cost you more than bring.

Yes, it could be done possibly (and all the DRM stuff is going to be used for that too it seems).

Example from what concerns me a bit: if I make a ringtone off your song and sell it, can you want your share?
Of course, and I'm willing to pay.

But if it's only *similar* due to physical constraints or rearrangement used to produce the 'tone?

So as "what volume and similarity of quotation make it a paid excerpt"?

> I bet Michael Jackson makes twice as much money from the Beatles publishing

Pretty good example of how things MUST NOT be. IMCO.

> that he brought a few years ago than he does from his own album sales...

---

Executive Summary: sorry, just can't agree. Good that you're warm and fuzzy but too bad the system won't hold long.

Date: June 16, 2003 @ 11:22 AM
> Define the term 'own', btw? (also see below)

The definition, as it pertains in the USA, can be derived from the USA Copyright office:

Copyright is a form of protection provided by the laws of the United States (title 17, U.S. Code) to the authors of “original works of authorship,” including literary, dramatic, musical, artistic, and certain other intellectual works. This protection is available to both published and unpublished works. Section 106 of the 1976 Copyright Act generally gives the owner of copyright the exclusive right to do and to authorize others to do the following:

To reproduce the work in copies or phonorecords;
To prepare derivative works based upon the work;
ownership, or by rental, lease, or lending;
To perform the work publicly, in the case of literary, musical, dramatic, and choreographic works, pantomimes, and motion pictures and other audiovisual works;
To display the copyrighted work publicly, in the case of literary, musical, dramatic, and choreographic works, pantomimes, and pictorial, graphic, or sculptural works, including the individual images of a motion picture or other audiovisual work; and
In the case of sound recordings, to perform the work publicly by means of a digital audio transmission.



> The thing is, "tracking" and "defending" all those tiny "rights" (which can be claimed on the equivalents of four-liners) can (and will) cost you more than bring.
Yes, it could be done possibly (and all the DRM stuff is going to be used for that too it seems).

The costs vary. Sometimes it can cost you nothing; Harry Fox takes care of it. In cases of tracking, I trust that if there's a song out there with a sample of my music in it, my publisher will find it and sort it out. If they can't find it, it's probably not making enough money to bother me.

> Example from what concerns me a bit: if I make a ringtone off your song and sell it, can you want your share? Of course, and I'm willing to pay. But if it's only *similar* due to physical constraints or rearrangement used to produce the 'tone? So as "what volume and similarity of quotation make it a paid excerpt"?

In the last case, it's something that i imagine gets settled in and out of the courts. It can always be argued that one thing sounds like another. Very difficult to determine these things. I'm not a judge, but if I were a lawyer trying to pin someone down for infringing my client, I wouldn't take the case unless I had sustainable evidence that they infringed. Arguing the similarities of the songs wouldn't be enough for me to waste my time or my client's time and money on the case. But then again, most lawyers are looking to cash in, aren't they?

> I bet Michael Jackson makes twice as much money from the Beatles publishing that he brought a few years ago than he does from his own album sales...

>Pretty good example of how things MUST NOT be. IMCO.

I'm with you on that. Paul is still kicking himself, I'm sure...

>Executive Summary: sorry, just can't agree. Good that you're warm and fuzzy but too bad the system won't hold long.

It definitely won't hold, and there's not a working system to replace it, either. That's for sure. It remains that you'll be able to get rich developing software; it can be protected with dongles. You can get rich designing clothes, shoes, cars, planes, trains, firearms, missles, etc. But unless somebody comes up with a solution, the day will soon come when it will be near impossible to get rich writing music. The film industry will soon die the same death; they're not far behind. At which point I imagine everyone will... what? Celebrate?

DRM is hardly the solution, though. They're going in the wrong direction, completely; it's actually utterly retarded. Stalin would have loved it, though...

P2P is here to stay. No one can or should take that away. It's technologies like this that will hopefully keep nightmares like 1936 Berlin from happening all over again. But I do think it's fair that copyright owners should retain the right to go after people on P2P who are distributing their works without a license. But... how to go after them? And how is the 'them' defined? That's the tricky part...

still seeking...

Seekingthetruth says, "Harry Fox takes care of it". You are mighty trusting there. For the sake of convenience, you are letting guys who are known for Enron-style accounting practices handle all your money. "If it weren't for blah,blah,blah, the artists wouldn't see any money at all" So are you saying that a royality of 2 cents, although you are due 20 cents is good, because of convenience. By the way, who checks and audits these people? Where can we find out how much is actually owed to the author of the copyright, other than what they, labels, Harry Fox, etc. tell you. Is there any independant auditing going on out there?

If you are in music to "get rich," then be a businessman. And be a good one, because if you are not you are headed toward RIAA label slavery. I am an artist. If I don't do this, I wither..that is deeper than money.

Agreed, seekingthetruth. P2P is definitely here to stay.

:-:~ PhantomGhost ~:-: