I’ve read both your license and the statement in your forum. We are going to have to disagree on what it means to artists. My only goal is to see that artists understand how they are going to get paid by entities seeking to profit from the exploitation of their music. Under the last.fm license, I can’t see the artists getting paid at all.

This is the language I was referring to when I said that by licensing material to last.fm, p2pnet would potentially be giving up artist rights that it does not have itself:

“1.1 Licensed Material

By uploading Licensed Material, You grant to Last.FM a non-exclusive, royalty-free licence [sic] . . .to record and otherwise exploit the Licensed Material as necessary for all purposes associated with the Last.FM service.”

“Royalty free” means “royalty free.” p2pnet is not making money off its download service. last.fm is, at last look, trying to build a business off of music. People who build a business off of music should pay the creators for that, don’t you think? If you wish to make it clear that you do pay royalties to collection services, you should say so. The license doesn’t do that.

“Otherwise exploit” means “otherwise exploit.” There’s no limit on what you can do under that term. That includes offering downloads. If you want to limit yourself to streaming music, say so. There’s no need to be that expansive.

“All purposes” means “all purposes.” There is really no limitation on the justifications you can give for that “exploitation.” If all you are doing is streaming music, you don’t need this kind of sweeping language.

This kind of expansive language isn’t really necessary if all last.fm wants to do is stream music. Perhaps your own attorneys would like to explain why you’ve found it necessary to give yourself unfettered rights to music licensed to you when you say you only want it for limited purposes. From the outside, it looks like you have bigger plans than you are letting on. That is never a good thing for artists.

When an artist sees a “royalty free” grant of rights to a for-profit business to “otherwise exploit” his or her music for “all purposes,” he or she should run, not walk, to the closest exit.

As for the “forever” remark, the license indicates last.fm’s intent to exploit the music “on its online radio player and affiliated outlets, such as embedded Last.FM media players, blogs, social networks and next-generation consoles.” That doesn’t even cover the “otherwise” means of exploitation the license gives to last.fm. If those “next generation consoles” or other future devices permit the retention of streamed content (and the satellite services provide such options now), control of that content is gone “forever.” Once you put it out there, you aren’t going to be able to pull it back in. That’s what I meant by “forever.”

The forum comments sound nice, but they don’t change the language of your license, and because they are not in the license, they are entirely unenforceable. There is absolutely nothing in the license that obligates last.fm to make royalty payments to anyone, SoundExchange included. If you wanted to make it clear you have that obligation, and intend to honor it, you could have put it in the binding agreement, not just in some offhand remarks posted in a forum. I am sure your attorneys gave you good reasons why that wasn’t done. The reasons don’t really matter, artists should just be aware of what the absence of that promise means to them.

But since that forum post referred to them, would you explain something about the terms of your direct deals with the major labels? As those payments will not be going through SoundExchange, do you know how artists on those labels are going to get royalties for airplay on last.fm? An outfit as self-avowedly artist-friendly as last.fm must certainly have gotten some assurances that the labels will give the artists full credit for their share. Perhaps you can use this forum to explain what those assurances are.

In a related matter, does last.fm provide SoundExchange with accurate and complete census data for all its streams so that every artist heard on last/fm, including those who sign your license, gets appropriate credit for royalties? An avowedly artist-friendly service that, at least in non-binding statements, makes a big point about paying royalties, should be doing its best to make sure that all the artists on its service are getting what they earn from airplay, don’t you think? Your appearance here is a perfect opportunity for you to tell the world what information you provide to SoundExchange and the other collection services.

This “experienced entertainment attorney” has read your license. He finds it overbroad for a service that says it just wants to stream music. A sweetly phrased forum post doesn’t change the license’s terms, and, if I must say so, inferring that the post does change the terms is not playing fair with the artists. If individual artists want to risk a relationship with last.fm in which last.fm has no obligation to pay anyone for the use of their music, and can do whatever they want with it, that’s their right. It was my opinion, and it remains my opinion, that p2pnet should not be a party to such an arrangement.

It is ironic that Clear Channel recently found it necessary to remove “royalty free” references in its licenses with artists because of public approbation, but that last.fm still defends the language. No one pretends that Clear Channel was ever “artist friendly” in seeking to eliminate royalty obligations in that manner.

Why should last.fm be considered any different? Why should last.fm need an expansive “royalty-free” license to cover a single service when it tries to present itself as actually paying royalties?

Fred Wilhelms

Fred is part of the MD team and I’m waiting to hear back from him. As soon as I do, there’ll be a post. No worries : )

Cheers!

Your article is incorrect in several respects. Firstly, as per clause 4.1 of the Last.fm Labels agreement, any label can terminate the last.fm agreement with seven days’ notice, or alternatively by removing the content from last.fm’s service. I’d like to know how seven days qualifies as “literally forever.”

Secondly, I would refer you to the statement made by our Head of Music, which is available here:

http://www.last.fm/forum/6666/_/308086

This describes how the labels agreement doesn’t waive your right to receive royalties via the normal collection societies.

I strongly recommend you update your incorrect article and I recommend your “experienced entertainment lawyer” re-read our contract.