>> From the library of Congress in Washington D.C. ^M00:00:04 ^M00:00:21 >> Jennifer Cutting: Hello everyone and welcome to our panel on Artists' Rights and the Digital Marketplace. The goal of our panel tonight is to facilitate a conversation about artists' rights and about some of the issues surrounding getting paid for our work in the digital marketplace. We've assembled an excellent panel of music professionals who will share their different perspectives on the issues. And after hearing from them, we will look forward to hearing from you about your questions and concerns. So, we have some heavy hitters with us tonight. I'm going to tell you a little bit about who's here on our panel. Maria Schneider who is doing her week long-jazz residency here at LC, is a world renown composer and leader of the Maria Schneider Orchestra. She has received five Grammy awards for her recordings, the most recent being, the most recent two being Best Arrangement instruments and vocals for her collaboration with the late, great David Bowie, on the single called Sue, or In a Season of Crime. And Best Large Jazz Ensemble album for her latest work, the Thompson Fields. In addition to being an accomplished artist, Maria's a very successful entrepreneur whose 2004 album, Concert in the Garden, became historic as the first recording to win a Grammy with internet-only sales. And that album also pioneered the crowd funding boom as the first album ever released on the Artist Share platform. Maria's also a passionate voice for music advocacy as you're going to hear tonight, having testified before Congress about digital rights, appeared on CNN, and being quoted in numerous publications for her views on digital rights and music piracy. Most recently, she and concerned colleagues in New York, have launched a wide spread campaign on behalf of music makers, musicanswers.org. And you're going to be hearing more about musicanswers.org very soon. To my right, John Simson here is Executive in Residence at the Kogod School of Business at American University here in Washington, D.C. He started out in the music biz in 1971 as a recording artist and songwriter. Since then, John's career has included stints as a manager, handling the career of five-time Grammy, Mary Chapin Carpenter, special advisor to Harry Belafonte for music and TV projects, and a 30 year career, a 30 year career as an entertainment lawyer advising clients on copyright and business issues in film, television, music and the visual arts. John was at the forefront of the battle for the artist's right to be paid in the digital era. From 2001 to 2010 he served as the founding executive director of SoundExchange, an organization he helped launch to collect royalties from internet and satellite radio services on behalf of recording artists and record labels. SoundExchange has now distributed over $2 billion dollars to artists and labels since it began. >> John Simson: If I'd only had stock options. >> Jennifer Cutting: John is currently president of the Music and Entertainment Industry Educators Association and he also serves on our National Recording Preservation Board here at the Library of Congress. So, we see him a lot. Spree Wilson in the middle there, is a singer songwriter who was born in Nashville, Tennessee, and attended Clark University in Atlanta, Georgia, where he met one of his mentors, Dallas Austin. Dallas was impressed by Spree's guitar skills and offered him an internship at his famous studio, D.A.R.P., as well as offering him a recording contract. Spree turned down the recording contract, sold his car, and bought a one-way ticket to New York City arriving with just a suitcase and a guitar. Being in the Big Apple, led to his meeting with his other mentor, rapper producer Q-Tip, who helped land Spree a major label deal with Jive Records and ultimately a publishing deal with Universal Music Group. And since then, Spree has co-written Afrojack's single, The Spark, which I looked at today and realized that you've got almost 35 million views for the Spark. Which has been A listed on BBC's Radio 1. In addition, he's co-written Sin City on Good Music Compilation album, Cruel Summer with Teyana Taylor. The album went number 1 on the U.S. top R&B Hip-Hop Albums, U.S. Top Rap Albums, and number 2 on U.S. Billboard 200. In addition to Q-Tip, Spree has collaborated with other note-worthy producers such as Novel, No ID, Jim Jonsin, Infamous, Malay, Robin Hannibal, Frequency, and Mark Maxwell. Please welcome our panelists tonight. ^M00:05:32 [ Applause ] ^M00:05:36 Even though we're living in a time when brick and mortar record stores have all but disappeared, the good news is in the digital realm, it's never been easier to share our music. But the bad news is also, it's never been easier to share our music. And millions are helping themselves to it and expecting it for free. So we need to have strategies to protect our music and to get paid for it. So, my first question to our panelists is, and I'm going to address this to Spree first. As we trend, we've transitioned from a purchase model where people paid to buy downloads and physical CDs, we've transitioned to an access model where consumers can stream almost anything they want on demand. What, if anything, about that is working, and what is not working? And what's the financial reality that you're living with, as an artist? >> Spree Wilson: Well, I think you have to, I think you have to first ask yourself, like what is it that you're looking for, or are hoping for as an artist, you know. I mean, the general, most basic thing that you want as a creative is to be heard. You want to be seen, you want your art, to at least mean something to one person. So, these streaming companies, like Spotify and Apple Music, and things like You tube, they help you get your music and your art out there. They give you to access to people in a bigger abundance of, you know, you can cast a wider net rather than 24 or 23 years ago, like, you have to perform in a club and hope that like more than 5 people show up. So, you know. >> Jennifer Cutting: Right. >> Spree Wilson: So, so yeah, that's the positive aspect, you know. The downside is that there's no transparency, right. Like, I put my music on Spotify, there's music on Youtube, it racks up a total of like, I don't know, 30 million views. >> Jennifer Cutting: 35. >> Spree Wilson: 35 million views. I have a song that's 45 million on Spotify right now. But I have no idea what that equals, because Spotify in a sense they get to make up their own numbers, right? They get to say, well, we're going to pay you, point, point, point zero four for your song. Now where do you get that number though? Like how can you equate, how can you, like, what is the equation that you put this price tag on this piece of art? And then they've said, well, on top of that, you know, if your song is through a major label, or you've collaborated with somebody who's signed to a major publishing company, what we're going to do is we're going to have this lump sum of money and we're pay them. Now, we're not going to tell you how much we're paying them, just know that we're paying them 70% of whatever we're making, whatever that number is, right? So it gives this pile of money to the labels. And the label says, well we're doling out the money as best we can. How much money is it, though? You just don't know. And so it's still just this thing of non-transparency that gets passed around and all this red tape you have to go through, like, how much, how much does 45 million streams on Spotify equal moneywise? >> Jennifer Cutting: How much does it translate into? >> Spree Wilson: Yeah, and you just never know. Like you just never know if you're getting the right amount of money. I mean for example, like just for my own personal business out there, the song she's referring to, The Spark, and on Spotify it has 45 million streams, it's Afrojack second highest streamed song on Spotify. Every quarter probably it's streamed at least a million times, which a quarter is 3 months. When I get a royalty statement, they pay in 4 quarters. So every 3 months, I get a royalty statement. The highest I've ever been paid on Spotify for a million streams, is $60. If that give you any idea of what, of what a high-stream song will pay you. >> Jennifer Cutting: And, John? >> John Simson: Now to be clear that's you being paid as a songwriter, not as the artist. The artist actually gets paid a little bit more. >> Spree Wilson: A little bit more, but. >> John Simson: Yeah, it's a little bit better. >> Spree Wilson: But, but-- >> Maria Schneider: So you can eat a nice restaurant, as opposed to taking your friend to a diner. >> John Simson: I'll go through some of those numbers in a little bit. Because I've spent my life since running SoundExchange looking at those numbers and they're pretty pitiful. We throw around terms like ARPU, average revenue per user. You know, or annual revenue per user, how much does each user of a service like Spotify generate? And obviously the problem is there are some people paying $9.99 a month, if you're paying $10 a month for Spotify, that's $120 a year that you're paying for music. That's not bad. If, you know, if 60% of that is being transferred over to the label and the artist to share, $72 you can sit there and 10%, typically it's 10.5%, gets transferred to the song writer and the publisher. So, they're going to make $12.60 if you're the song writer and publisher. But remember, the more people stream, the lower your rate gets. Because they more they have to pay out for the $10 a month that you're paying. So they love people who subscribe and then don't use it. You know, it's kind of like breakage, but most people use a lot. I can tell you in the first 5 years of SoundExchange, we logged in 7 billion performances. And again, it's before Pandora, before some of the major streaming services existed. 2001 to 2006, 7 billion performances. >> Maria Schneider: From multiple locations on the internet. So everybody-- >> John Simson: These are all streaming music, so they'd have to be non-interactive, streaming like college radio stations, AOL had a streaming service. CBS, all the broadcasters who stream on line. >> Jennifer Cutting: Can you explain the difference between interactive and non-interactive? >> John Simson: Sure. A non-interactive service is like Pandora, where you can't pick the song you want when you want it. You can go to Pandora and say, I want to hear Taylor Swift. And they'll play you a Taylor Swift song and then they'll play you a lot of other songs that they think you'll want to hear. It's more like a radio station. You can't specifically say, in fact the worse thing to do is say, I want to hear this song by Taylor Swift, because then they can't play you that song. They're not allowed to play you the song that you asked for, because they get a compulsory license from the government. So they can play anything they want. Taylor Swift cannot take her music off Pandora. She can take it off Spotify, she can take it off any interactive services because in the interactive world where you can demand the song you want, when you want it, artists have the right to say no. It's usually their label that has the right to say no. But there is some control there, which is why you see an artist like Drake say, I'm going to give an exclusive to Apple Music. Or you see an artist like Kanye say, I'm giving an exclusive to Tidal Music. So artists can have those kinds of exclusive relationships in the on demand world. In the Pandora world, or when broadcasters stream online, called simulcasting, so I Heart Radio, where you hear Clear Channel stations streamed online, or Bonneville or CBS, any of the big radio conglomerates. When they stream online, they have a compulsory license given them by the government, and basically what it says is you can stream whatever you want, anything publically released in the U.S. is fair game. All you have to do is pay the royalty rate set by the copyright royalty board that's located here in the Library of Congress. And you have the data to SoundExchange of what you played, so they know who to pay. So, you know, so, non-interactive is very easy, it's kind of a plug and play. You know, you basically start streaming tomorrow and no one can sue you. You have to get about four licenses to do that. And they're licenses that people have to give you. So, it's a very easy situation. Spotify and on-demand services, much more difficult. So for example, when Spotify needs to stream music, they have to negotiate a license with every single owner of the master recordings. Whoever owns those recordings, typically record labels, which is why the major labels in order to let Spotify exist took 20% equity in Spotify. So the major record labels are investors in Spotify, or they have equity, they are waiting for the IPO. >> Spree Wilson: And now SoundCloud. >> John Simson: Yeah, this is the case with pretty much any service that needs those massive catalogs of recordings that are owned by Universal, Warner, and Sony. That they can demand equity to allow these services to stream on demand. Think of Spotify, and Apple, and Tidal and these services that serve you up records when you ask for them. They're the replacement for record stores, right? Because you're getting to hear exactly what you want, when you want to hear it. Obviously, there are some holdbacks. Adele didn't put her record on Spotify, or, you know, on streaming services. And there's a big battle going on too between paid services. You don't get Apple unless you pay for it. You don't get Tidal unless you pay for it. You might have a free trial for a very limited period of time, but you have to pay. Spotify has the free tier, which is the overwhelming tier, 600 million unique users. Versus the paid tier, where there are about 30 million worldwide users. So you can see, 20 to 1. Pandora, the same way. They have both ad supported service, most of their users are on the ad supported free service, where they don't pay anything. Kind of like the old radio model, you listen to ads and you get music. But, it's interesting, you pay $4.00 a month to get rid of the ads, very few people do. They're willing to take the 2 minutes of ads. I kept yelling at Pandora, you need 10 minutes of ads. Because that way musicians actually can make a living, more people will buy the ad free because they don't want to listen to 10 minutes of ads. And it's very interesting, the free service of Pandora generates last year about $1 billion dollars. Last year $1.1 billion. ^M00:15:36 81 million users, if you do the math, they earned about $13 -$14 per person, per year. Right? Over the air radio, the Clear Channels of the world that you listen to when you're in your car, with their 10 minutes of advertising. They earn $71 per person, per year. I already mentioned, Spotify, if you're paying for it, $120 per person, per year. Satellite radio at $15. Sirus XM $150 to $160 per person, per year. So, you can see that subscription isn't a bad thing if people are actually paying. It can generate a liveable wage, if people are paying. If people are not paying, it's really, really difficult. And YouTube is the worse. Because YouTube with over a billion users, generated less than 4% of the industry's revenue last year in royalties. So that's the real problem. >> Jennifer Cutting: Speaking of a living wage, what would Spree's career look like in the old days of record stores? I mean, compared to the $60 he makes from massive numbers of people streaming his music. What would his career look like in the old days? >> John Simson: Well I think-- >> Jennifer Cutting: With just as many people listening to his music. >> John Simson: The hard part is translating listens into sales. But for example, I think the way to look at it would be, if he had 45 million listens on the radio, how much would ASCAP or BMI pay him? Right? And you know, again, the rates online have been horribly low. Partially because, because of radio, ASCAP and BMI were locked into very low rates with traditional media. And so when they went online, they continued to get very low rates, kind of mirroring what they were getting at radio. And online music is not like, really like radio. It's much more personalized. It's a much, you know, more interesting listening experience and so it's capturing more and more listening hours, and yet not paying out what it should. And by contrast, SoundExchange didn't, we didn't have a radio rite in the United States for recording artists. That's another problem we can talk about another time. The hundreds of millions of dollars that U.S. artists lose because radio stations don't have to pay them anything. But because we didn't have a 3%, 4% legacy radio rate, we're getting 50% of Pandora revenue, whereas song writers are getting 4 or 5%. So the artists are getting 10 times as much as song writers, and that's not fair, frankly. Song writers should be getting far more. You know, these services need to monetize better. >> Jennifer Cutting: If you don't want it on YouTube, you can ask them to take it down. There's a way to. It's tortuous. >> Spree Wilson: It's a very, like, she can tell you. >> Jennifer Cutting: I'd like to turn it over to Maria, to talk about the take downs. >> Maria Schneider: Well, there's so many things to talk about here. It's incredible. One thing just before I go into that, that I'd like to talk about because to me, one of the most eroded royalties and rites that I feel is very frustrating and has been around since the piano roll, and that's the mechanical royalty. When something is fixed onto a record, onto a CD, onto a download, onto a device where you can play it, there is a statutory rate approximately 9 cents a song, that was always figured into the cost of making a record. Right? And now, that note, we know, Spree and I were just talking today, about the fact that you can get, there are all sorts of apps out there now, that you can rip an MP3 off of any video. You know, in a matter of seconds. And have it. And if you can listen it again on demand again and again, we know that this is a replacement for buying that music. We know that. Because people are not buying music as much anymore. So if I think about your 45 million plays, and what I believe should be happening, because to me, what really angers me about the whole business is that people are not looking at the music. Maybe because it's not fixed in form as an asset. I mean, it used to be in Tower Records, they would put, Marshall Gilkes, in my band, he was just pointing out, remember in Tower when they put that plastic thing around so you couldn't steal the CD. Right? Wrapped a thing of plastic around this record, that had to be taken off when you purchased it. So when it was in physical form, somehow we all looked it at that way. Now that it's in digital form, we aren't looking at it that way. And so, people aren't looking at, at something that costs money, is of value. When I made my record The Thompson Fields, it was $200,000 to make that record, pay the players, the engineers, the everything, the hours of mixing. A year of my time and I did not include myself in that budget. Then, I haven't included the years writing that music, preparing that music. This is a $400,000 investment, okay? So, when my music is played, I, somewhere, or is distributed in some kind of way, I want to set my own price point because I know the cost of that. And if my music, I would never put my music on Spotify. You could sooner roll me over in, in whatever. But, say my music was on something like that, you can bet I wouldn't want somebody basing the mechanical royalty on a percentage of what that company tells me their profits are. So, that's how they're figuring out these mechanical royalties. It's a, it's a percentage of their net profit and the value of the big data company is a very difficult thing to value. Because their value is something that grows and grows. We know, what's the value of Google? Google is all that data, it's all that power, it's not just the advertising, it's the data analytics. It's the capability that they know, you know, that this person who listens to this music, all the things that crawl around your devices that know everything that you do. The data lords are taking, that's the name of the piece I've written for the Library of Congress, Data Lords, are taking, appropriately. Are just you know, taking all this information and becoming hugely powerful. So, to me, each unique listen, if somebody listens to more than a half of your song, they can listen a thousand times, I don't care. But that first time they listen a full time through, or let's say two times, let's be generous to the new internet generation. I believe that, that person automatically should have to pay that 9 cents mechanical to you. And that's, imagine how huge that would be. I don't know how many unique, do you know how many unique users, listeners you have? >> Spree Wilson: That's something to look into. >> Maria Schneider: Well, okay. So let's just say it's 4.5 million. So you know, if it's 4.5 million and it's 9 cents, what is that? >> John Simson: It's a little under $450,000. >> Maria Scheider: So it's $450,000, there's a half million dollars almost, in his pocket for his mechanicals. And you know what? With the kind of use you have, you should be buying an apartment. I'm sorry. You know, really? So, anyway, the mechanical royalty erosion is the first thing that has just, you know, made me crazy. If you look at these big data companies and what they're doing, and right now the Office of Copyrights is doing a study on safe harbor provisions. And these companies like YouTube and Google, and all the internet companies. So in 1998 they created something called the DMCA, which is the Digital Millennium Copyright Act. It was designed to protect these ISP's, this is before Napster, before all these things, these ISP's that were basically pipelines for information coming through, you know. And they didn't really know AOL, you know, Verizon, I don't know, they didn't really know exactly what was coming through their pipeline. So they said, we don't want to be liable. We can't be liable when we don't even know what's coming through the pipes. So they said okay, so you get Safe Harbor. But then they created this, take down. I don't know when the takedown was created. >> John Simson: It was, it's part of the negotiation in 512. >> Maria Schneider: Part of the negotiation, is that people who were being infringed, if their work was being infringed, they could have, file a takedown. So these companies had to have some place where that person had the capability to go up and you know, and file this takedown notice. The problem is now with these new companies. Look at YouTube. This is a modern day wholesale publishing company. They are, and they are inducing, you know, there was a case between Viacom and YouTube. Because Viacom said, you know, they're, they're letting our music come up. They shouldn't be getting Safe Harbor and it went to court. They lost but then Viacom appealed and the judge looked at it and said there are some interesting facts here. I think we're going to send this down to the trial court again and take a look at this. And there were employees at YouTube that indicated that they had, you know, instigated and induced this infringement which they are not allowed to do. And that's what the court was trying to decide. ^M00:25:39 Is, are these companies aiding and abetting this infringement? The answer is without question, yes. All you have to do is go to YouTube and upload something. You upload in 2 seconds flat, no questions asked. Nobody says, do you own this? Or, so, I can show them in a little while, I brought up some kind of interesting things on YouTube. For instance, you can cue in, or search no infringement intended. Let's see what happens here, if we do that, what comes up. Okay. Let me just see if I can find it easily and quickly. No infringement intended. >> On the e. >> Maria Schneider: On the e, thank you. There we go. You know what, can you do this for me? Because you're. No copyright infringement intended. 659,000 people have uploaded stuff and it says no copyright infringement intended. I just really want to share this band, you know. And then these things get like millions of views. So YouTube, I mean, they know this stuff is there. And so if you want to take it down immediately, so there's no warning that says when you put it up, exclamation point. If you don't own this music, or you didn't write the music, or you haven't gotten permission, you could be in a lot of trouble. But if you want to take your music down, there's a big yellow thing with an exclamation point, under penalty of perjury, you better not be, you know, taking down something that isn't yours otherwise you could be in a lot of trouble and there's question after question. It's honest to God, it's incredible. It's, and clearly they want people to be able to put this stuff up. There are people, this week, I, there was a situation where I was digging around, it's fun to dig around YouTube to see just how egregious some of this stuff is. So I happened to see a site with just tons of independent jazz musicians. I'm a jazz musician, so I know all these people. So a guy might be on, you know, he had several albums uploaded on some young guy's YouTube channel, hundreds of records. So, I spoke to Clarence, Clarence said oh my God, that's crazy. So the guy ended up, he contacted this guy, he ended up taking his whole site down, because I think he got freaked out, his whole YouTube channel. And, I found the teacher of this person, because he was a young guy, and I said I want to talk to him, and find out some things from him. And I said, I promise I won't use your name, I won't tell anybody about you, I just want to find out some facts because there were ads on all these. They were all full albums, full albums, they all had a string of ads on them, and he had I think it was 3.5 million views. Okay? So if you look on YouTube what they charge for an ad, between 10 and 30 cents, so imagine what they're bringing, you know, in. So, let's, let's say it's only one ad on each one for 10 cents, 3.5 million, that's, how much? >> John Simson: Typically, YouTube's been paying out about $2,000 per million views. And I think, some of the major companies may get a little bit higher rate, but YouTube-- >> Maria Schneider: Wait, 2 million what? >> John Simson: $2,000 per million views. So it's incredibly low. >> Maria Schneider: It's incredibly-- >> John Simson: But in other words-- >> Maria Schneider: What are they taking? >> John Simson: Oh, they won't tell you how much they're making. >> Maria Schneider: Well, what was interesting with this kid, I promise I won't tell anybody, what are you making on those ads? He said, I didn't make anything. YouTube generated those ads, it came on their own. He said I don't know where the money was going. And he said, I presumed that because they did that, and a lot of the stuff was somewhere else on YouTube, it was okay. So, you see, this whole thing is serving YouTube. It's, it's taking what ours and taking it away and trying to make us feel like it's doing something good for us, and it is not. >> Spree Wilson: A lot of the kids, like the ones she is referring to. They don't really know that they're doing anything wrong, you know. They have no idea what they're doing, they're uploading music. And, you know, we talked about this specific situation, you know, this kid thinks the ad money is going to the artist. You know, meanwhile, her friend doesn't even know his music is on YouTube. He's looking at me like why is my whole album on YouTube. And so it's this whole thing, like, where, it brings me back to my first question, where is the money? >> Maria Schneider: Yeah. >> Spree Wilson: Who, like, who has the money? >> Maria Schneider: I'll tell you who has it. You know, what it is, it's a redistribution of wealth. That's what it is. By big data companies. So, it's, they use music and this is my beef with Sony, Universal, and Warner, and Spotify, too. It's like a feeding frenzy here, everybody panicked what to do, you know, when things started to go south with the internet and file sharing. And so, and I had the perfect solution and I'm still doing it through Artist Share, which I'll explain later, which is basically about self-ownership and selling directly to the fan, and knowing who the fan is and owning my own data. But what these companies did is they realized how do we, on the internet, how do we get eyeballs so that can amass data, so that we can sell advertising. We give them entertainment, we give them music, we give them movies. We give them all these things, just to attract eyeballs. And so how do you get more eyeballs? You make that music free. And YouTube somehow tried to, when I testified before Congress, I was next to one of the general counsels of YouTube and she had the, I just couldn't even believe I heard her talking about a woman who, you know, had a million plus views, and it really helped her career, and it was really wonderful, and it really worked for her. As like this is doing us a favor. I said, that is, I, okay, so maybe this woman it was a success for her in some way. Maybe she was a songwriter that was actually a performer, let's not forget that a lot of songwriters are not performers. So, I said that's like going into a poverty stricken neighborhood, finding one person that wins the lottery and calling-- >> Spree Wilson: Making them the exception. >> Maria Schneider: Yeah, this is a great sustainable economic model. Look at this person, what they've achieved. You can all hope for this, you know? I was like oh, please. So, anyway, so what happened is Spotify needed music, right? They want to be this big data company. Daniel Ek wants to be the answer to piracy. I mean, honestly, you know, to me, he's the pirate in sheep's clothing, you know. So, what did they do to get all that music, because they couldn't really get the library? They gave the equity to Sony, Universal and Warner. And Sony, Universal and Warner did it, nobody really knew about it. It was money that now, one of them, I think it was Warner, said somehow you know, since everybody's been really making a hullabaloo about this, like we'll distribute it. How do you distribute it? Somebody dies, you're going to go back and find the estate, I mean. This is, someday when they're equity comes through, it's utterly ridiculous. And so, these companies, now that represent these artists through their contracts, maybe this is a harsh way to say it, but I dare, I'm going to use a harsh analogy. I feel like a lot of these artists, it's almost now, these companies, they're now big data companies. They're no longer music companies. They have equity. They're in the business of making music free so that their equity can go up. And that they can make money in other ways. And so these musicians that are tied to these people, it's like being chain ganged to working, you know, I'm doing my music while they, so that can sell it for free and, or give it away for free and become more valuable by it. It's completely wrong. If I had one wish, it would be that artists could, if there was a way to say, you have broken our fiduciary trust, you have, this, you represented me as an artist, as a publisher, at my financial interest, and you sold me down the river. I want out. Because you know, how many musicians had contracts that foresaw in them these other ways of distributing music? I mean, you can say that you're a lawyer-- >> John Simson: Oh, I mean there's been a huge issue in the music industry over the last decade because of the way music is distributed. And one of the big cases actually was brought by Eminem's production company, FBT versus Aftermath, Dr. Dre's label. When songs were being sold on iTunes for 99 cents, you know, the record company would say, oh, we're selling a single, it's just like the way we used to sell singles, and so you get 12% of the dollar. So here's your 12 cents. They pay 9.1 cents to the publisher for the mechanical, that's 21.1 cents, and they keep the rest of the money that iTunes would pay them. iTunes out of the 99 cents would keep about a quarter, so there'd be about another 50 cents the record company would pocket. So Eminem's producer said no, no, you're not selling anymore. You're licensing Apple the music. ^M00:35:53 And when you went in to look at the contracts, most artists' contracts say, if you sell it, it's 12%, but if you license it, we get half. So all of a sudden the record labels had to pay half of the money to all of these legacy artists from the 70's, the Allman Brothers sued. There was a big Warner settlement, there was a big Universal settlement, there was a big Sony settlement. So that was great. That was a great windfall for all the legacy artists because their contracts didn't say anything. In, starting in 2003, now that we knew iTunes was the way we were selling music, in those contracts going forward, it says when we sell through iTunes, it's a sale, it's not a license. So they've protected themselves going forward. I actually think, Maria, that the label's taking equity. I mean, there's definitely a cynical view. And I don't know that they ever planned to share it with the artists, the fact that they were using these vast catalogs of music to get the equity share. And now they've had to come forward and say, oh well, we'll share this with, you know-- >> Maria Schneider: One of them has. >> John Simson: If there's ever an IPO, no all three I think, have. They've all come forward. But I actually think it was the record companies finally having that ah-ha moment, so they had the opportunity to own MTV and they didn't. They had the opportunity to own Soundscan, which creates data about sales, and didn't. You think about the Victrola, you think about all the technology that delivers music to consumers, where all the money's made. Right? It's not the, the creators have always been screwed. You know, it's always been the hardware companies that have made the money. It's always been, you know. Sony was an electronics company, but because Betamax lost out to VHS, they bought a movie studio. We're not going to lose this next time, we'll have our own content. So, I think it was really them strategically thinking, we're going to now take equity in all these new start-ups, we don't know which ones are going to succeed but if they do succeed, we're going to be in for it. >> Spree Wilson: Do you think it was a like, from the Napster days, of we didn't buy to the Napster thing and we missed out on that? >> John Simson: Well, you know, the Napster thing is kind of interesting. As an aside, I was actually subpoenaed in the Napster lawsuit, but that's another story for another day. Shortest deposition in history. But, I was actually starting SoundExchange out of the back of the RIAA. When that was actually going on. And the RIAA actually reached out to Napster and said, you guys need a license. We should negotiate. >> Jennifer cutting: Let's spell out the acronyms, Recording Industry Association of America. >> John Simson: Representing the major labels and some major indies. And this is back in 1999, 2000, when Napster started with the file sharing. And they tried to license them. And basically the answer was, we don't need licenses, this is fair use. And finally, you know, Napster got sued and they lost in the 9th Circuit, and they ended up getting shut down. So, as, what's kind of ironic, is that's 1999, 2000, and now we have Spotify which is basically a Napster with licenses. >> Spree Wilson: Right. >> John Simson: Right? And it only took us 10 years to get there and lots of losses to piracy in the intervening years. You know, I think there have been band aids along the way, the iTunes download store was a wonderful thing for a while. You know, people buying individual. People wanted to buy the one track, not the whole album, okay, we'll let you do that. And that was in response to Napster. It was the record companies trying to do something proactively. You know, if you think about CD stores, back when we had those, like Tower and HMV, you know. They weren't really interested in selling CD singles. Because you think about the profit major on a CD single selling for $2.99, taking up the same amount of shelf space in a record store as the full CD. Right? So there was no business in selling singles, you know. When I was managing artists, we might, you know, we had 45's right? Then we had ca-singles. You probably, don't. I don't know if any of you have any of those. >> Spree Wilson: Maxi singles. >> John Simson: And then, yeah, the maxi singles. If you're in the dance music. You know, the 12 inch, you know. >> Maria Schneider: Can I just say something? Because, and I know Taylor Swift came out and said this. You know, people are willing to buy music. First of all, I'll tell you through my website, because I have all of my data, I see every sale that comes in. The vast majority of people are buying my CD. Okay? And people are willing to buy music. People are willing to pay for downloads and they work. It's just if it's made available for free, who doesn't use that? You know, so this is not a matter of what people want, it's a matter of what large, large companies have made us, made people think that they want and need. Of course everybody takes free if they get it. At everybody's expense, except their own. And it's a dangerous thing for us to not be awake to that. And I really, so right now, the copyright office is doing a wonderful thing. And they're taking in, they've just closed it now, in comments about Safe Harbor. And a lot of people, I wrote in, a lot of organizations, I know Music Answers wrote in, the RIAA. >> John Simson: Thousands of artists. >> Maria Schneider: Thousands of artists have written in. ^M00:41:02 Basically saying, you know, and I think the argument needs to be made definitely that you know, these companies are purposely setting this up. And trying to create of culture of infringement for their own good. And >> John Simson: If I can just add to that. When you were talking about the Safe Harbor, this is the section 512 of the Digital Millennium Copyright Act. Where you send a notice, and the person running the service has to take it down, or they can be held liable for infringement. And again, remember it was written during a time of dial up. It was written during Netscape, it was written during AOL. We didn't have services like Google and YouTube which are content delivery systems. This was really meant for dumb pipes, that was the expression that was used back in the day. So here's the thing that infuriated me. You send a takedown notice for a particular piece of content that you own, and they take it down. They abide by the law. A minute later a new person puts the same content up. They don't have to filter and go, oh wait, we already took that down. Someone shouldn't be able to put that back up. They just put it back up. It's like whack-a-mole. And then you've got to send them another takedown notice. Now, if you're the major label and you have a whole department and that's all you do, sending tens of millions, hundreds of millions, of take down notices, every month, you're okay. But if you're an independent artist, you can't afford to do that. You don't have the resources to do it. There have been some independent film makers, who have made these independent films on their credit cards, only to see it being distributed for free because they can't get it taken down. And you know, the other thing you were talking about, how they try to threaten you when you were taking something down. You better have the right to take this down, or we're going to come after you. >> Maria Schneider: And now YouTube has just started a program that if somebody takes, let's not mind the fact that, you know, probably 99.9% of takedown notices are definitely authorized, but every once in a while somebody does a malicious takedown on somebody, or whatever. So, YouTube has started saying that they will pay up to a million dollars in attorney's fees to defend some of their users who have something taken down that they feel is wrongly taken down. Never mind are they're going to pay, you know, a million dollars of my time and effort. I want to, can I show you something that just came out. This is pretty wonderful because, so, the YouTube takedown thing is frustrating. The Google takedown thing is impossible. And Google, so it, I mean, let's make no mistake, Google and YouTube equal alphabet. Which is you know, the big, you know the data lord empire. But Google is creating searches to many of these sites. Some that are foreign that don't have to adhere to the DMCA. Many are that torrent sites, where you send in your DMCA thing and they say, oh we can't help it, it's server to server and we can't do anything. You know, in the meantime, they have my entire sets of scores and parts and videos that go with it that are worth $115 on my website. So, this man just put out this thing about how to send a takedown notice to Google in 46 or more easy steps. So, let's get started. Go to Google.com, look for the word copyright at the bottom of the page? Nope. Look for the word legal? Nope. Look for the, contact or contact us, nope, nope. Link about, nope that's not it. Link on terms, scroll down, scroll down, how about privacy and copyright protection, now we're on our way. Click on the link for help center. Click on the link for submit a legal request, okay. Read the drop down menu, click the link for the word tool, read a set of 12 choices, select web search, read a list of 8 choices, none of the choices mention the word copyright, really? You invite me to submit a legal request and none of the choices are copyright, and you receive 75 million take down notices a month. Okay, that's crazy. So, select, I found a site that is engaging in suspicious behavior. The page is solely about phishing. Go back, Google will not let me go back. Must start over. Repeat step 11. Select, I have a legal issue that is not mentioned above. ^M00:45:33 I mean, this is incredible. Ah ha, removing content from Google is one of the choices. Select. Warns me that they will send my notice to the Lewin project, formerly Chilling Effect, and my notice will be published for all to see. Really? They haven't even found out what I'm complaining about yet. This is intimidation tactic step number 1. Are you the copyright owner or authorized to act on his or her behalf? Select yes. Select from two choices, image video and other. To speed things up and avoid yet another menu that will inevitably go with other, I select video image. Google asks me to yes or no the question, the image video is of yourself? Why this matters, I can't fathom. I have already said I am the copy owner, so I say yes. DMCA form? Nope, this warning appears. Under U.S. copyright law, a photograph or video is generally owned by the photographer videographer, unless the photo was taken as part of his or her responsibilities, blah diddy blah diddy blah. So this guy goes on to say, but that's not true. What if it's a selfie, then I'm taking my own photo. So then it goes on and on and on. He hits every dead end. So he goes, let's see I, let's see, they demand that I provide them a written assignment of copyright or they will not process my request. Intimidation tactic number 2. Since I know better, I ignore this. Click the link for here, request for me to enter my email address. Email address entered, click returns. Sorry Google doesn't recognize that email. Create an account using that address. You have to create a Google account. Okay? Click next to an attempt to bypass Google. Will not let me fill out a DMCA form, unless I've created a google account. Creating a google account will require me to divulge my name, email address, birthdate, mobile phone, it goes on and sign up for all their, you know, purple Kool Aid, we get to the bottom, you know. So, this is-- >> Spree Wilson: That's the list online. Imagine if you had no list and you had to do that all through experience. Imagine how frustrated you would be by step 12. >> John Simson: I have a new assignment for my students. I'm going to give them that site. >> Maria Schneider: But this is, could any court of law except maybe one in Washington when there's probably three or four buildings of Google lobbyists in this town. Could any court of law, not possibly look at that and say, they really don't want this stuff to come down. I mean, come on. You know, when there is no list of such questions when you put something up. There's no, and even if you submit a request and you say, I don't want you to link to that site, or that's a Russian site that's, you know, doing cyber or you know, infringement or whatever. This doesn't even guarantee that link is going to come down. So, one of the ideas that I had, that I think would be amazing, is that you know, with all these data analytics, they should be able to know, like, I 've done many takedown requests. And I've never had a counter notification, you know. Nobody's ever argued with it. I should get a high rating. I should be able to do fast track to Google and say, hey, Lime Torn, bad, bad company. They're infringing my stuff so that you know, thousands of other people, like myself, millions of other people, like myself that have a high rating, are given a warning that Lime Torn is, that they immediately take down the URL to that company. I mean, there are things they could do, if somebody made them do it. >> Jennifer Cutting: Maria, what's the ray of hope? There's so much broken. We've had a wonderful list, a litany of everything that's wrong, and it really is not a good situation for artists. Is there a way for artists to outsmart the data lords? Is there way to circumvent, is there a way to outsmart, is there a way to? >> Maria Schneider: There are two things that are going on. So one, is at the very beginning I think she said something about musicanswers.org, and I want to tell you about that. Because a group of musicians started this in New York and I'm a part of it, and so is Spree. And the idea is that a lot of organizations that were representing you know, write and advocacy and doing great things. But none of those were really for performers, songwriters, composers and producers. The people that actually make the music without also having the record companies and the publishers in there. Even ASCAP and BMI, you know, they've got the publishers, they've got the writers, and there's always this little bit of conflict and competition. So this, we all have the same, basically the same interest. So, we decided to create this campaign, and create a declaration of principles. And the declaration of principles is basically to, that people can sign on, and say, these are the basic things that we all must agree and adhere to. Transparency. Here's some we come together as writers, performers. We oppose practices of video streaming services, internet services and other businesses that appropriate the value of our music in order to make huge profits selling advertising and data. We believe like music should be treated like. That means performance and composer. That this really should be, fair is fair. Transparency and, so people are signing on to this. We already have Carole King, Herbie Hancock, we have Steve Wright, we have John Corviano. >> Spree Wilson: David Byrne. >> Maria Schneider: David Byrne, we have many, many people and we're trying to get students. And we're creating all sorts of videos to wake people up, so the ideas is education. And anybody can sign up. People can sign up as fans, as people in the music industry to basically get people to say, yeah, this is what we believe, and this is what we want to advocate for. And have this huge list of names, and we're already up to 1600 and we just got started. And have this huge list of names and videos and things that say, we're watching you. We want better, we expect better. We now know what's going on, we're not going to sleep at the wheel anymore. So, if you can't change Congress and you can't change it through law, you can change it through exposure and pressure. And then the other thing that I always advocate for, because it works so much for me, and that is Artist Share gave me this opportunity to put my music out there, this platform where I can connect with fans in meaningful ways. And Taylor Swift is a big advocate of connecting with fans, and I can tell you from me, it works beautifully. And you know, sharing, my whole process and everything and having access to all that data and knowing every person who buys my music. Owning my music. Not giving away my rights. Running my own show. Having my own archive of my own work. And you know, I'm able to pay for a $200,000 record. In an industry where almost nobody can pay for a $200,000 record. And it's jazz big band. So, I was always imagine, I look at, you know, some artists, I look at Taylor Swift you know, and I imagine her numbers if she was doing what I was doing. Insanely eye popping. I mean, really. >> John Simson: Well I mean but you saw, when she withheld her music from Spotify, from the free services. And look what happened with Adele. She said no to Spotify, 8 million sales. So you still can sell. >> Maria Schneider: People buy. >> John Simson: People will buy if they can't get it for free. >> Maria Schneider: Yeah. That's the point. People will buy if they can't get it for free. >> Jennifer Cutting: So, just say no. That's one of the take aways from this. So as the takeway-- >> Maria Schneider: Wait, just one second-- >> Spree Wilson: I just want to add something, just like, I think also, one key component is you have to switch the way of thinking. Just, just to people in general, you know. Especially people of my age and generation, it's like, you have to understand there's a group of kids from 2000 to 2016 who have grown up and have never paid for music in their life. They have no concept of going to a store, buying a cd, taking it home, putting on some headphones, unwrapping the cd, turn the music on, looking at the credits and vibing out to music. >> Jennifer Cutting: And reading the liner notes. >> Spree Wilson: Exactly. Their whole idea of what music is, is almost like background noise. Like, have you heard that new Drake song, that new Taylor Swift song? We'll play it in the background as we get ready for a party. And I just think you have to change the idea of what music is to people to make them feel like it's something special, and not just this thing that they're supposed to have. That they're, and it just comes for free, you know. That's a longer road to get to I feel like, but it can be done, you know. >> Maria Schneider: If there was a, I'll tell you if there was a financial motivation for that from a company like Google, they would make it happen overnight. Because they've manage to change a generation, and once that, you know, once that dam is broken, that's their idea. All the dams are broken, this is how people get music now. It's like wow. This is what the damage they've done. >> Spree Wilson: And so it's just an awareness also, I think making the issue with music being free up, not just a music issue but a people issue, a person issue. You know, like, when you think about people who aren't getting paid the right amount of wages, you all feel for them, you know. Like, I did when I said I got $60 for a song that was streamed millions of times, I heard the whole crowd just gasp, you know. Because how could that happen, you know? Just imagine, like, I think when people think of songs and songwriters and artists, they think about these guys who have millions and millions of dollars and it's really one percent of the entire pie, who is that successful. >> John Simson: Less than one percent. >> Spree Wilson: Yeah, for the most part, I'm from Nashville, Tennessee, for the most part, people are, people have worked their whole lives just to live a decent life writing songs. That's all they've ever known, you know. And as the years progress, that likelihood of providing for their family gets taken away from them every day. ^M00:56:13 >> Maria Schneider: Well, and we know from the copyright report, I think we've talked about it today, how many songwriters in Nashville have left the profession in the last, I don't know, >> John Simson: Like 10 years, 12 years. >> Maria Schneider: 80%. >> Spree Wilson: This is a songwriters city. This was a city that was built on songwriting and to see these people not be able to take care of their family, provide for their household. It's sad, it's really sad. Because this is not just a music thing, it's a person, it's a people thing. You know, just imagine, like you're going, you guys are going to your jobs tomorrow, and just imagine your boss comes in and says, hey, today you guys are going to be working for free. I'm sorry. That's just the, or you know what, we're going to pay you, but we're not going to tell you how much we're going to pay you. >> John Simson: How about a penny an hour. >> Spree Wilson: I think your job is worth zero zero zero point 4, give or take just, you know. So. >> Maria Schneider: Or it's like going to Congress and saying hey, we just found a way to hack into all your 401K's and give away $15 little things. Everybody, here, have a frenzy at it. And everybody can just pick away and say oh cool, wow, I can get $15 from [inaudible], cool. I'm going to take $15 from you know, and they just go around, and that's what it is. It's like, I used to work sometimes with Toots, Toots Goman and he used to say when he would announce playing the Blusette, before he would play it, this is my social security. This song, you know. It is, your songs are your assets. They're something that should pay you and, you know, your kids, and you know, for 75 years, you know. It should belong to you and it should be protected. And you know what, it's in our constitution. Copyright is in our constitution. >> Jennifer Cutting: And this is the home of U. S. copyright, the Library of Congress. >> Maria Schneider: Yeah. >> Jennifer Cutting: Thank you all so much for your eloquence on this subject. And I'm just very curious how many creators are in the audience tonight? Okay, for those who are music creators, as a take away, I'm just going to ask what is one thing, I'm going to ask all three of you. What is one thing that music creators can take away, to take home tonight from this panel that they can do it when they get home, to better protect their rights in the digital marketplace. John? >> John Simson: Sure. Well, for one thing there are lots of different pools of money. And if you've put out recordings, and your recordings have been played on Sirius XM, if they've been played on Pandora, if they've been played on any of these streaming services, you want to make sure that you are signed up to collect from all those pools. And so most people know that if they're a songwriter they have to sign up with ASCAP, BMI or SESAC, those are pretty much your three choices. You can self-publish, you don't have to go through one of the PRO's, but, you know, most people go through one of those three. Make sure you're a member. They collect money from the public performance of your work as a composer for the composition. SoundExchange, the organization I started 16 years ago now, collects for you as a recording artist and for you as a label owner. Make sure, if you own your own masters, if you are the label as well as the artist, you sign up for both shares. Frequently an artist signs up with SoundExchange and they only sign up as the artist, not thinking oh, I own the masters, I'm the label owner too, and they leave half the money on the table. And we used to have to track people down, when all of a sudden there'd be this pool of money and we'd go, wait a minute, you know, we don't know this label, we'd call the artist and go, do you know who the label is? Oh, I'm the label. So, very simply you make sure you sign up as the artist, as the label. If you're a background musician and you play on other people's records, especially if you play on major records, there is a fund that is controlled by the AFM and AFTRA that's American Federation of Musicians and now it's SAG-AFTRA, but American Federation of Television and Radio Artists, has an intellectual property fund based in California and they get 5% of the all the money SoundExchange collects, so about $40 million last year, be probably $50 million dollars this year. And there's also other reuse fees when songs get put in movies, when they get reused for other things, so there's probably well over $100 million dollars a year for background musicians and background vocalists if you play on fairly popular recordings. You have to get in touch with them and let them know who you are, and where they can find you. So, it's really important to let people know. There's another much smaller fund. It's probably $2 to 3 million dollars a year, it's located here in Washington. It's called AARC, the Alliance of Artists and Recording Companies. I used to be on their board and basically they collect money back when dat tape was going to revolutionize the world and we got this law passed, that, you know, that every time blank media would be used to copy things or hard drives, but we got screwed on that. Because unlike Europe where lots of money is being collected in these levies, we don't get hard drives on computers because they're multi use. We don't get blank cd levies unless it says a music cd, and most people just buy regular blank cds. But it could be hundreds of millions of dollars if people were actually paying for the media on which they're copying our stuff. So AARC, again, is something that you should look up. I believe, if you google Alliance of Artists and Recording Companies, you'll find it. >> Jennifer Cutting: And SoundExchange's web site is? >> John Simson: Soundexchange.com >> Jennifer Cutting: Soundexchange.com >> John Simson: And they actually have a place on the website where you can actually search to see if you have money. And I just saw a wonderful site, called buzz angle, of course it's way more expensive than you'd ever want to spend, but I found out I had 35 streams on Spotify on my record that has never been digitally released. So I still king of mystified, until I found out that somebody has been bootlegging it. So I'm owed 16 cents. >> Jennifer Cutting: Spree? Thanks John. >> Spree Wilson: I just think the biggest way, the most, or one of the ways you can protect yourself is just through awareness, you know. When I was a kid, nobody had any information for me. There wasn't a lawyer to go to, or there wasn't another artist, I literally had to either, it was trial by fire or figure it out as I go. So I think for artists and just people who are interested in the subject matter at hand, it's just research. Awareness, when the article comes out, read it. I know it's a lot of information to take in, and you're not going to figure this whole thing out in a day, maybe not even a year. But the more you keep abreast of it and the more awareness that you have of it, of how your music is getting out there, what you're getting paid for your music, what are different avenues to put your music through, I think, I think will give you much more protection because you won't go into it so blindly. You know, there's millions of kids are tossing their music on Spotify and have no idea how much they're getting paid or if they're supposed to be getting paid at all. So, I think that the more you know, as they used to say on the NBC thing, the more you know, the more you going to prepare, of you know, how to attack the giant, the data. >> Maria Schneider: The data lords >> Spree Wilson: The data lords of the music industry. >> Maria Schneider: So, absolutely. I mean, that's what we're trying to do at Music Answers. So, I hope that you will go to Music Answers, look at the videos we're making and you can endorse the, if you like the declaration of principles, to me there's nothing not to love. You endorse it, sign up, and then, you know, we'll keep you apprised of what's going on and what things are changing. There are a lot of sites you can go to, Music Business Worldwide is a wonderful, just sign up there. Everyday articles come in, and just shockers, you know, about the business. It's really good. ASCAP has a wonderful sort of advocacy, you know, they upload all sorts of links and things of things that are coming out every day. And they're all tools that just help people to know and I do think the more people that know and the more people that share, and say, you know this isn't what I think. And are vocal about it. And, it puts pressure on these companies to change. I mean, you have to demand transparency. And fairness and you know. >> Jennifer Cutting: Thank you. Thank you. You've all been so articulate about all of these issues. Let's have a round of applause for everybody. ^M01:04:43 [ Applause ] ^M01:04:48 And now, we'd like to hear from you. What are your questions? Do you have any questions for our highly qualified panelists? Please take a mic. >> Hello. My name is Howard Crowell, I'm actually a Grammy member. Which is how I found out about this. I have a question, you said that the Congress is not doing enough. I know that, you know, I go to, we have something called Grammies on the Hill every year. I've been going there for the last four years. So every year, a lot of politicians, you know, Nancy Pelosi, they all come to this huge major event that is supposed to bring, you know, music performers and lawmakers together. and they all promise that they're going to kind of deal with this, this you know, this problem with our copyright infringement and things like that. And it doesn't seem like we're making any progress. It seems like every year, you know, we as the members we get these emails from the hill saying you know, we're going to tackle this this year, go to your neighbor, talk to your member of Congress. You know, kind of rally the troops and it doesn't seem like we're making progress. So, why do you think that is? >> Maria Schneider: It's because of lobbying. You know, because, it's marvelous that you came here for Grammys on the Hill. That's a great, great event. And it is a wonderful experience to experience all these musicians getting together and getting to have meetings with Congressmen and tell them our issues. So I applaud you for doing that. It's, it's a huge thing and I think it can make a difference. And it does make a difference. But I also know that in our meetings, you know, I remember Jerry Nadler, sitting over his desk and saying, The radio lobby is really strong. You know. Just that giving a little bit of a reality check that these forces and lobbying is you know, is powerful, powerful stuff. And, and that's why I do think it's so important that organizations like NARIS that are doing things, and what we're doing, and all these different organizations, grass roots people, the individuals. I know Jerry Nadler told me, it's the individual stories, the people coming like Spree and saying, I had 45 million views and they sent me a check for $30. He said that those kind of stories mean a lot to them, and so, you know, I guess we just have to, we just have to keep pushing and trying and hoping and doing everything we can. >> John Simson: You know, I think having been a lobbyist myself for a number of years when I was running SoundExchange, interestingly back in 1994 my partner who is here tonight, Tom Karic and I were approached by the Recording Industry Association of America to join a lobbying campaign. To get a law passed to make broadcasters pay recording artists when they played songs on the radio. And we got our clients involved, and we reached out to other artists that we knew and other managers, and got people involved. And we had this campaign going to get a full performance rite in the United States. And when we failed to get that done, we did not get radio stations to pay, but when we went to the digital side during that campaign in 1995, who was our ally? The broadcasters. Because they sat there and said, Oh, our future competitors who are going to be doing satellite radio and internet radio, all this digital stuff. They're going to have to pay a royalty that we don't have to pay. So, because the broadcasters are on our side and these digital services didn't exist yet, we got the law passed. In 1995, the Digital Performance Right and Sound Recordings Act. The first time recording artists in the United States ever were entitled to get paid. And now it's 20 years old. The broadcasters of course kind of shot themselves in the foot. They didn't realize. They thought they had exempted themselves from ever having to pay. But now when they stream online, they do have to pay. You know, so they're a little bit upset because they realize that eventually they'll be streaming online completely. But you know, they make $17 billion a year playing ads around music, and we get zero. Songwriters get a little. But not nearly enough. I mean, imagine if you had, if you owned music. At a rate, a guy said I have this brand-new invention. It's called radio and here's what I'm going to do. I'm going to play your songs, amass people listening. I'm going to sell ads. But I'm not going to give you anything because you'll sell concert tickets. You'll sell records. It's fine. I'm going to make $17 billion but I'm not going to guarantee you anything. That's not a very good deal. You can't even say no. It'd be one thing if you could say no, I don't want you to use my stuff. But you don't even have the right under US Copyright Law to say no. As Maria said, there's a broadcaster in every congressional district. If you want to get elected, you need to be on the radio and TV. So, that's why the broadcasters are such a strong lobbying force. You know, Congress always said to us when we would come to them, when we almost had a deal in 2010 where the broadcasters finally agreed to pay something. When the broadcasters and you guys come together with a deal that everybody's willing to agree to, we'll bless it. You'll have legislation. That's the only way it'll ever happen. And I think given the power of Google and these companies, that's the only way that will ever happen is if the tech companies, you know, and the music industry come together with a, some sort of a bill that they can. >> Maria Schneider: Just in case some people don't understand this, performance royalty is for the performer. So, for instance, Aretha Franklin has been on the radio how many, you know, millions and millions of times. She never got a penny. >> John Simson: No respect [laughter]. >> Maria Schneider: She never- >> John Simson: Otis got respect because he wrote it. >> Maria Schneider: But she never got a penny. What are the 2 countries, there's only 2, like- >> John Simson: No, there's more than a couple. But they're not- >> Maria Schneider: Notable ones. >> John Simson: Yeah, North Korea doesn't pay, Iraq doesn't pay, Sudan doesn't pay, Iran doesn't pay. Pretty much all the other countries in the world pay performers when they play it on the radio. >> Maria Schneider: Those countries, the sad part is because it's not reciprocal, because, so in Germany, GEMA, they have a great performing rights organization, GEMA in Germany. Because we don't pay their artists when their German artists are on the radio here because we don't pay them a performance royalty, therefore they don't pay Aretha Franklin's. And so these countries, I know a guy, he said they, he had a hit down in Brazil with Brazilian musicians and he was one of the songwriters. Or performers on it. And, or was a hit worldwide or something. His friends, you know, they all made great money. They had like apartments on Copacabana, you know? And this guy didn't get a penny. So it's hurting us internationally. >> John Simson: He needs to call me. I can get him the money. >> Spree Wilson: Yeah. >> Maria Schneider: I mean, the international, it would be interesting to get the international loss of income into the United States from that. >> John Simson: I did a little bit of that when we were leading this campaign and it's hard to totally quantify but US repertoire except in certain countries where language issues are pretty major, it's 30 to 50% of the world's repertoire. So, when you look at that, the labels get their share, by the way. Because remember, when your record comes out in the UK, it comes out on Sony UK. They're a local company, they get paid. The artist, if they're American, is an American artist. They don't get paid. So, we estimated somewhere around $100 million to $150 million a year that US artists were losing in foreign royalties. So, it's not insignificant. When you think about it, and also the other piece that people forget is, you know, it's not all pop music. Europe plays a lot more classical music. They play a lot more jazz. And so it's a lot of really niche music that is losing that money. EDM for years, it's starting to obviously catch up here but for years there were artist here. There were loopholes. So for example, one of the things I would tell people is go record in London and if you record in London, then you can get to collect your royalties around the world. >> Spree Wilson: That's exactly what my business manager, he gave me this bit of advice which enabled me to get a lot more money overseas which with the Afrojack song, Spark, because it was a Dutch artist, I was able, and I was a writer and a performer on the song. I was able to collect all the money that probably would've been withheld from me. >> Maria Schneider: That's why because you told me that I was asking him about his BMI royalties and he said that the foreign royalties are pretty good and that's why. Because I was little surprised. >> John Simson: Well, wouldn't BMI, it would be your foreign royalties- >> Maria Schneider: But they're coming through BMI or, well- >> John Simson: They're probably coming through either SoundExchange or you might have a business manager. >> Spree Wilson: Yeah, a business manager, yeah. >> Maria Schneider: Okay. >> John Simson: I actually did that for Cobalt for awhile as a- >> Jennifer Cutting: I want to get to a few more questions. >> Maria Schneider: Okay, sorry. >> Jennifer Cutting: Does that answer your question? >> Yes, yes. Thank you. >> Jennifer Cutting: Very fully. Thank you. Other questions? >> Nelson, from Altavoz Entertainment. I actually want to follow up with Jerry and what people can do. There is something called the music act, go to musicact.org. And that is supported by Jerry, introduced, and it's supposed to give US record labels up to $1 million a year to make, manufacture and export US-made music. Why we don't, and I've been going to Grammys on the Hill for 15 years. We don't, because we have Halliburton-ized the US recording industry. US-made music is not exported out of the US. You're not going to make money digitally. Digitally is only a fraction of all the money earned. You have to do both. And we have a music act. We need to get people to go. You need to get your local representative to go why are we not doing anything supporting our local music? Because Sony, Universal and Warner Bros. Warner Bros., actually BMG is back. There are four majors. BMG has Janet Jackson, Alabama, Scarface, it's not in the news. But they're back because majors make billions of dollars selling records still. And they're getting everybody else to go play in the digital sandbox that makes microcents. So, you have to do both. The other thing is you need block chain. It has to be tied to a public block chain and then your rights will all get done out. And we're fighting this out in industry. >> Maria Schneider: What is a block chain? >> So, the block chain is what this crypto currency is. This is a public ledger that would allow all the right holders to have their information promulgated out and then if someone used it, it's tied to a pair key so your information goes out, you have a public key that allows it to the broadcast. You have a private key that your information, say I want to use it, I get it right. It reports back to you. It would send a payment to him the songwriter. It would send it to your distributor, to your aggregators, all done. >> Maria Schneider: One place. >> But guess who doesn't like that? The established people in our industry. And so the indies have to take it back. >> Jennifer Cutting: Thank you. Other questions? >> Yeah. Actually I have got about 10 questions but I'll start with one. >> Jennifer Cutting: Pick your favorite one. ^M01:15:46 ^M01:15:52 >> I've watched stuff on YouTube and I could never figure out, like, first of all, I hate YouTube. I can't understand why you would actually get music from YouTube. Is it just a place? I mean, like, when people go to YouTube, do they just, using it like a radio? Like to play it? >> Maria Schneider: Check stuff out, just to get, to check it out without buying it. >> John Simson: It's on demand, too. Because they let everything stay up there. They don't take anything down, so you know you'll find everything there. >> Because my question was I'm a photographer. And photography is being destroyed on the Internet. It's just, it's unbelievable. Because if you are represented by an agency, you know, AP or Magnum, they really can't do anything. They do stuff for marquee photographers. The biggest concern isn't so much that photography is showing up in all these websites and nobody can do anything about it. What seems to be particularly irritating to a lot of photographers is that their work is being taken and the individuals are then doing stuff to it and reposting it in some other form that's not what its original intent was. >> Jennifer Cutting: Analogous to sampling. >> And it's just like, when you see it, I mean, I've heard from photographers who said I saw and I didn't even know it was mine at first and I remember, what is this? And that is just, it's maddening. And only really in the top, only the top, I know most people don't know a lot about photography but like you get some premier photographs, Magnum or AP or Reuters will come down and they'll, the lawyers will show up. But for the most part, it's Katie bar the door. >> John Simson: I was going to say, I actually was involved in some meetings last year about, with some of the photographing agencies about trying to create a SoundExchange-like right for photographers so that basically people could use them online but there would be charges, you know, on websites. And they'd have to pay percentages of revenue, things like that. And then the pool would come in and then you'd have to figure out how to, it's very difficult. Obviously, more difficult than songs. >> Yeah, it's, I mean, they do, each agency has their own mechanism but each one of them is different, different forms, different price. But they really say we don't want you taking the photographs and changing them around. And I guess I'm not 100% sure, because I see a lot of stuff on YouTube, and it seems to me like nonsense. Like, if I have a daughter and she looks up a Beyoncé song, she'll get 30 things that aren't even the things she's looking for. And some of them are actually, sometimes they're even pornographic, which I don't know what, how that's allowed. >> Spree Wilson: It's funny you say that because we talked about, we had this conversation about remix culture and like a photographer, like your photographs when somebody takes sitting re-purposes it. They do the same thing with music. Like I've had songs where somebody just found it, found a cappella and did a remix and had it on every, it's a repurposed. It's my song but they repurpose the for their own, like, artistic creative choice, whatever. And they're, I don't know if they're making money from it but it's the same thing. It's so hard to have somebody take it down. You know? Because a remix, it could be 1000 remixes one song and sometimes you just don't even know how many remixes there are, you know? I've had a song that was remixed 20 times. I've only heard it like 10. It's just that somebody sent me a paperwork of all the remixes that someone to the research but I haven't heard all the remixes so I just don't know. Like, and it's the same with your photographs. Like, you just don't know how many times somebody has reposted your photograph, especially in the social media age. Man, we're like I could take your picture and put a filter on it and then I could distribute it to thousands of people and somebody else take that same picture and do the same thing. You just have no idea. You know? There's no, like, like I wish there was some kind of like watermark or they take watermarks off now too so it's like I just don't know how you can keep up with any of the artwork or your work. You know? >> John Simson: It's like first-grade Photoshop. Eliminate all that stuff. >> Jennifer Cutting: Thank you so much. Thank you. We have time for one more question? >> Hi. Hello? So I wanted to sort of get some feedback from you about one of the aspects that I think is under discussed in terms of the transition from the ownership model to the access model and that's how the, it gets talked about in terms of total industry revenues. And I want to talk about how those revenues end up being distributed across different kinds of art. You know, different kinds of music is intended for different kinds of listening. There's pop music, which I love, which is sort of the kind of stuff that you listen to over and over again and kind of can be the soundtrack to your life. And then there's kind of music that's not for everyone. Like big-band jazz or the noisy punk rock that I make my basement. It's never going to be mass audience music in the same way. And it might be not the kind of thing you return to over and over again for repeat listening over and over again but a few listeners that you do sit down and really take it in and can be transformative and really powerful artistic experiences. And one of the challenges with the on-demand streaming economics is that it seems set up to reward the kind of pop music. Repeat listening over and over and over again for a period of years at the expense of sort of the art music, the fewer listens, the niche, the little guys. I'm really concerned about whether there's any kind of economic incentive to validate those. I mean, I'm excited by what you're saying about building those direct relationships with fans and explaining the economics to them being a means of recourse to counterbalance that. I'm wondering if you're getting those kinds of feedback from your communities as well? >> Maria Schneider: Well, one thing, so I was talking to a person in the music business in New York just about Spotify in the way they calculate, you know, when there's a $9.99 subscription fee. And I hadn't heard about this before and I thought it's an incredible idea. He said he feels that if somebody pays, if you pay $9.99 per month and you're listening is, you know, big band jazz and that's all you listen to and maybe listen 9 times. That, he said your 9.99 should go, be divvied up to the people that you listen to. And if you're a person that pays 9.99 a month and you listen 5000 times, you know, to something else, then it gets divvied up by 5000 times amongst those things. And I think that there is a certain beauty in that because I think that people would be maybe more likely to pay a subscription fee if they knew that the money actually was going to those people that they listen to. I think that would be a meaningful change and a meaningful step. Now, there are a lot of people that are not going to like that. You know? But I think it would be good and good for the music. And then obviously, you know, I'm just a fan of what I described before for myself. But that little step in the streaming world I think would make the difference. >> Jennifer Cutting: Thank you. >> John Simson: Yeah, I think if you think about it, we have the technology to be able to do that. I mean, that's the most fair way to distribute the money, based on total plays per user for the fee- >> Maria Schneider: Yeah. Going to those people. I mean, it's easy to do that. So, yeah, but it's difficult. And this is changing. It is going to change your musical culture. You know, because it is hurting those little niche musics that don't have, you know, as big of an audience. And usually that music is the most expensive to record, too. That's the irony. You know, the classical music and it's, so it's tough. >> Jennifer Cutting: Thank you. Thanks for your question. >> Maria Schneider: One more. >> I just want to ask one question. >> Jennifer Cutting: Okay, one more. Let's get you on mic. >> Okay, so it's really quick. This kind of pertains to me and like if I don't know if I'm going the right direction or not. But I should think you maybe if you can let me know if I'm not. But, okay, so basically I'm an aspiring musician. My music name is Rosebud. It's enchanting, it's captivating music, bliss. A lot of people say it gets underneath her skin in a peaceful manner. So, I want to know, of course is a creator of your music, it's like a baby. You know, like you created. So I did copyrighted, I copyrighted it, like maybe about 3 weeks ago. But am hesitant, I don't know if it's me, like, being scared or it's like, I just want to protect it. But you know how like I can go to someone and he may have a recording studio and they want to record it. Like, am I going the right way or should I have like documents to show, like, you know, the way to protect it or this is what's going on and make it pacific in writing? ^M01:25:38 >> Spree Wilson: Are you asking if somebody's recording your song for you? >> Yeah, like, I mean, should I be putting it on YouTube, should I be putting it on like SoundCloud? I don't know. I'm a very critical thinker. Times, certain stuff like this. So, I'm not so, like, quick to jump. So, I just want to know- >> Spree Wilson: Well, the first question is, what are you looking for? Like, that would be my first question as an artist. Like, what are you, what is your goal with the song. Because sometimes it's not about making money. Sometimes it's just about being heard, right? So if SoundCloud is the way for you to get heard, you know, that might be a outlet or it might be like what Maria said. Like, she has a platform where you can put your song out. Or it might just be a personal agreement with you and whoever you're recording a song with. But I think the first thing you should ask yourself is like, what is my goal but this song? What is my goal this music? And I think that can guide you into whatever direction you're going in. Everything else is just about research, you know? Spotify, how much they'll pay you, SoundCloud or whatever. But you should ask yourself, like, how do I want to get this music heard? Like, what's the best platform for it? And I think everything else will guide you after that. >> Maria Schneider: And I also think that thinking ahead, because you're just starting out. If I was just starting out right now, my goal would be building my own career. And if you throw your stuff, I think you want to pick those things that you want to get out there as a magnet but then you want the things that you preserve. There's a new thing that's just starting now, it's called fanfunded.com. It's basically like artists share light, that anybody can do. But the beauty of it is that you will know, you will build your own audience. You will know who they are. You can contact them. You can share things with them, and you can build a career. So, the idea isn't just making that first record or doing those songs and necessarily on the first one making all your money back. But then maybe your next one builds so people get to know what you're doing and you know who they are. You, then when you do your second record, you already have this many people you can send out an email and say hey, or note or however they're going to communicate, you know. I am now going to fund another record or I'm going to create a single or I'm going on a trip here and I'm writing music about this. Come follow along. You can help fund it or whatever. And building it. So that you have your own little empire at the end. Because otherwise they will suck you dry. You know? It's very difficult these days. I think it's very important. Ownership is everything. >> John Simson: And I think Maria makes a really good point which is if you, one of the problems with some of these big streaming services is that they don't tell you that people are more listening to you. And that's most valuable data, is having that relationship with that fan, having their email address, knowing who they are, knowing what they like. You know, and because that way you have a direct relationship. You can monetize it or you can give it away for free but you have a community. I think that's important. >> Spree Wilson: Sometimes it's about putting those breadcrumbs out. Like she says, she has wonderful platform which is like put the breadcrumbs out there and then direct them to your own platform where you can be the beneficiary of. >> Maria Schneider: Build it and they will come. Slow and steady is, you know, slow and steady and being good to your fans. That is, you know, creating a relationship of trust and respect is a huge part of it. >> Jennifer Cutting: Thank you. I want to say a big thanks to all my panelists. Maria Schneider, Spree Wilson, John Simson, for being with us tonight. Thanks also to the music division folks who planned this panel and all the events in Maria's weeklong jazz residency. Ann McLean, Nick Brown, David Plyler. We'd also like to thank our sound engineers Mike Turpin and Jay Kemlaw. Thank you very much. And videographer Thom Wolf, thank you. Before we go, I just want to let you know about one more upcoming event. The concert is sold out so we can't invite you to that but Maria has an upcoming workshop this Saturday, April 16. That's at 2 o'clock. It runs from 2 o'clock to 4 o'clock and it's in our beautiful Coolidge Auditorium in the Jefferson building, the one in the big down. Maria will be working with members of the Bohemian Caverns Jazz Orchestra and the Levine Music Premier Jazz Combo. And both of the groups will perform and then Maria will give them some coaching and some feedback in a workshop-style environment. But the workshop is free of charge. So, seating is first-come, first-served but there's loads of room in the Coolidge. It's a big auditorium. So, we're hoping to see you there this Saturday at 2 PM in the Coolidge and I want to thank you all so much for coming out tonight. Thank you very much. ^M01:30:35 [ Applause ] ^E01:30:40