Last.fm and music licensing
p2pnet news | music:- p2pnet has just launched a Music Download section. The idea is to offer a showcase featuring songs from indie artists: a space where visitors can sample and download free MP3s before heading over to the artists’ own sites.
Maggie Council and Fred Wilhelms are, like me, fervent supporters of independent music. They’re collaborating with me on this project and I consider myself and p2pnet readers ( not to mention visitors 
) very lucky indeed to have them.
As well as being singer/songwriter who’s close to releasing a new CD, Council raises money for the Tampa Bay Performing Arts Center in Florida.
Wilhelms is an entertainment lawyer based in Nashville, Tennessee, who also contributes regularly to p2pnet. Among other things, he’s been taking on ex-RIAA debt collector SoundExchange, spun off to act as a royalties agency and which has been prominent for its support of the attempt to boost online radio royalty rates to such heights they would have forced many, if not most, small webcasters to fold.
The SoundExchange is equally prominent (infamous?) for its inability to locate artists it’s supposed to be paying, the money owing ultimately winding up in SoundExchange coffers.
Meanwhile, p2pnet RhYnoECfnW suggested Last.fm might be a good way for artists to publicise themselves and their music, and for p2pnet to similarly gain exposure for the Music Download section. He posted:
I’m really pleased to see the new music downloads section finally come to life on p2pnet, but I’m wondering if you have considered uploading the songs to Last.fm, and putting p2pnet as the label? It’ll gain a ton of extra exposure, both for the music and p2pnet, and it’s free, so I can’t see what the drawbacks would be to doing this. Just a thought, and keep the music coming.
It looked like a good idea, but Willhelms didn’t agree saying:
The Last.fm licensing agreement gives them an unlimited right over the music submitted to their site, literally forever, and waives all rights to royalties, Forever.
Last.fm’s Russ Garrett took strong exception, posting:
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.
Responded Wilhelms to Garrett:
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?
Jon Newton – p2pnet
Use free p2pnet newsfeeds for your site. It’s really easy!
Subscribe to p2pnet.net | | rss feed: http://p2pnet.net/p2p.rss | | Mobile – http://p2pnet.net/index-wml.php
Net access blocked by government restrictions? Use Psiphon from the Citizen Lab at the University of Toronto. Go here for details. Download here.
