Billions and Billions: Carl Sagan Meets the Music Modernization Act | MUSIC • TECHNOLOGY • POLICY

According to a post in Variety, there seems to be a rather large chunk of cash sitting at the digital music services.  As Artist Rights Watch posted,  Variety’s initial story read:

The DSPs are holding some $1.5 billion in unmatched mechanical royalties. If the MMA passes, that money would be passed through to the MLC which would match it to the songwriters and publishers.

Variety subsequently updated the post (you might call it a “correction”) to read:

The DSPs are holding some $1.5 billion in unmatched mechanical royalties [ADDED — that total is the sum of all Notice of Intent (NOI) filings currently parked at the U.S. Copyright office, and is climbing.] If the MMA passes, that money would be passed through to the MLC which would match it to the songwriters and publishers.

Both these statements are rather odd.  If there’s $1.5 billion in unmatched royalties at services, one must ask what is it doing there?

On the other hand, if the “correction” is correct, the $1.5 billion sum includes, I guess, royalties payable for the NOIs at the Copyright Office.  Not clear from Variety, but this reference must be to the “address unknown” mass NOIs (since Variety refers to “at the Copyright Office” and I think that’s the only NOI that would get filed “at the Copyright Office”).  (See my post on Big Tech’s mass NOI loophole from the ABA Entertainment and Sports Lawyer.)

This “correction” is also very strange to me because the mass NOIs are royalty free–that (and escape from liability) is the whole point of the loophole.  I think we have probably bored everyone with many posts on just what a joke these filings are.   Everyone from Ed Sheeran to the Neville Brothers are subject to these NOIs, and I’m told that at least Ed Sheeran is getting paid under a voluntary agreement.  Having said that, I would be very surprised if there were anywhere near 1.5 billion NOIs filed at the Copyright Office, although there may certainly be tens of millions or maybe over 100 million.  I’m willing to be educated otherwise, but that 1.5 billion number just doesn’t scan to me.  (You can look these up on SX Works’ handy NOI Lookup, the best tool for finding out if you have one filed on your song.)

The only way I can think of that both Variety’s original statement and the correction could be true would be if there were a voluntary retroactive unmatched payment by the digital services as part of the deal for the Music Modernization Act.  Even so, $1.5 billion is awfully generous, even for the biggest companies in commercial history.  But then, if it is a voluntary payment, how would you ever know if it isn’t also voluntarily disclosed?

So I’m looking forward to seeing if there’s a further correction.  It could just be confusion on the part of Variety or their source.  Time will tell.  But the entire exchange shows that the Copyright Office should never have allowed Spotify, Amazon, Google et al to get this started.  Strangely enough, Apple seems to get by just fine without using “address unknown” NOIs.

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