‘Dear Fred’, from Dick Huey
p2pnet news view P2P:- “I had a problem with part of your last post, but I couldn`t quite put my finger on it until about 4 AM, when the realization finally struck me,” says Nashville entertainment lawyer Fred Wilhelms who, on behalf of his clients and unpaid artists everywhere, has been doing battle with the SoundExhange (SX), the now independent collection agency which was once part and parcel of the RIAA, with all that implies.
Do former connections just fade away?
In July, 2007, an unsigned Reader`s Write accused Fred Wilhelms of having a vested interest in criticizing SoundExchange for not paying artists, said p2pnet last month, continuing »»»
The author later proved to be Dick Huey (right), one of the RIAA-appointed `label representatives` on the SoundExchange board of directors.
An exchange of comments ended in Huey agreeing to answer questions put to him, partly in apology for what he acknowledged was an unjustified personal attack on Wilhelms
Huey finally came through (see the list at the bottom for a blow-by-blow) and the sentence in the introduction is also the intro to a Reader’s Write Wilhelms left under Fred Wilhelms to Dick Huey , continuing »»»
Specifically, this is what you said:
SX reporting on track level data vs. a sampling of data the vast majority of SX data *is* reported on track level data. In fact, 95% of the money distributed is based on census data. So the statement in absolute is not correct, but in practice, it is primarily correct. And it`s possible that that the sampled 5% disproportionately affects both the artists you represent, and the artists (and labels) I represent. So naturally, I`m interested in getting to 0% sampled data, which is one of the reasons I`ve established the metadata committee to review the feasibility of providing software to get past the inherent difficulties small webcasters (especially schools) face in reporting. I expect this committee to get into the trenches of this issue, and I welcome all opinions and suggestions in order come up with the best possible recommendation to the full board.
This is the line that jumped out at me: In fact, 95% of the money distributed is based on census data. 95% is a great number, and it certainly looks like SoundExchange is doing a great job in getting that all that money out, but this statement is patently misleading, because that great percentage is based on money distributed. The problem with SoundExchange isn`t the money distributed, it`s with the money NOT distributed. That`s the money that`s building up in that investment account to the tune of nearly $200 million as of the end of 2008.
And there`s a whole other layer to the rotten onion of that bogus statistic that SoundExchange`s own data exposes. In filings with the CRB in May of this year, SoundExchange acknowledge that, as of March, 2009, it still hadn`t distributed 32% of the collected artist royalties, and still hadn`t even allocated over 16% of that money for money received for the calendar year 2006. Over twenty-seven months AFTER the end of the reporting period, one dollar in every three that artists were entitled to was still sitting at SoundExchange, and SoundExchange still didn`t know who was entitled to half of that. You can`t foist that off on sampling problems, and that 95% figure becomes a whole lot less impressive when you realize it`s 95% of a number that is far less than what SoundExchange should have paid out.
And before you explain this away as one bad year, the same filing says that, for 2007, you still don`t know who was entitled to 25% of the artist money, and you still hadn`t paid out over 40% of the artist money, 15 months after the end of the reporting period. For the first quarter of 2008, after one whole year, you still hadn`t identified the proper recipient of nearly one-third of the artist royalties, and you had paid out LESS THAN HALF. So, to put your claim of 95% payment in the proper context, for the first quarter of 2008, after one year, SoundExchange had paid out 95% of 48% based on census data. In this light, the number is not as impressive as you wanted it to sound, is it?
This is the problem with SoundExchange`s attempt to hide what it does from public scrutiny, Mr. Huey. Sometimes the real data comes out, and the attempts to hide are futile.
So, I really don`t need the official communication outlets of SoundExchange to put a spin on these numbers. I can read them myself, and they leave me with only one question for you;
Do you think not paying out 32% of artist royalties after 27 months is doing a good job?
P.S. I heard from a friend of mine who read your last response and got a real kick out of your claim that SoundExchange is not beholden to the RIAA in any way.
He reminded me that during the last Webcaster rate setting hearings before the CRB, SoundExchange`s counsel held repeated strategy sessions with RIAA counsel, in the open, right in SoundExchange`s office.
Now, of course, the RIAA had absolutely no standing to participate in those hearings directly, so do you really think SoundExchange was acting independently or taking marching orders? Did the independent Directors have a representative at the meetings?
How about the artists? Were they represented? If you knew about this, why did you leave the SoundExchange strategy up to the RIAA? And if you didn`t know about it, does it make you wonder what else you don`t know?
You see, Mr. Huey, the same thing keeps happening over and over. SoundExchange people like you say one thing, and the things we can see with our own eyes say differently. Who are we supposed to believe?
Huey responds »»»
Fred,
This is a more productive note, and I thank you for it. I had finished this post, and was ready to send it to Jon, and then saw your subsequent post questions below. So I’ll address a couple of your additional points as well here.
I am not taking the position that Soundexchange does not have any problems; my recent posts should have made that clear. Where processes or procedures can be streamlined or improved to achieve a better result, they should be, and it is my job to help make that happen. It’s in that spirit we’re having this discussion. And I would add that, since you haven’t questioned or brought back up several portions of what I responded to in my last post, I feel we are moving in the right direction. I know there is more to discuss as well.
Also, I want to directly address something you said in your second post above – you mischaracterized what I said.
In my recent November post, I said:
“re Artist Reps and RIAA control of the process You’d be hard pressed to find an artist representative on the Soundexchange board who’s in any way beholden to the RIAA, that I can say from personal experience. What about the artist board members who represent performers organizations? Surely they’re responsible to their constituency of artists, many of whom are Soundexchange members?”
You said:
“P.S. I heard from a friend of mine who read your last response and got a real kick out of your claim that SoundExchange is not ‘beholden’ to the RIAA in any way.”
Hold on here. There is a big difference between what I said, and what you said. Please don’t mischaracterize what I actually said. I said that artist representatives on the Soundexchange board are not beholden to the RIAA, and I’ll stand by that. And it is a complete fabrication to insinuate that I “left the Soundexchange strategy up to the RIAA”, irrespective of who was talking to who. The Soundexchange people I know on all three sides who were involved in the negotiations (artist, independent label, major label) would get a kick out of *that* statement. I believe some of the webcasters that I worked with closely would as well. I participated directly in the discussions which led to a pureplay settlement, and I did not take *my* “marching orders” from the RIAA.
I don’t understand what the problems were with SX responding to your inquiries in the past, but I stand by what I said about their official communications outlets. When I approached the external affairs team about it while writing this post, Laura (External affairs) volunteered to sign on to this forum on Monday and pick up the conversational ball.
Since she is willing to answer most of the broad-view concerns, in particular the concerns that I’ve stated I’m only tangentially involved with, I’m going to focus this post on just a few areas.
Sampling:
In my view, your second post (to your first post), is a re-direct, without giving me credit for answering your original question. Your original question:
“I’ve got to raise one more thing since I went and lifted that last quote from the FAQ on the SoundExchange site.
In the same answer the following claim appears, as it has since the website went up:
‘SoundExchange reports on track level data rather than a mere sampling of data. Unlike other collection societies, no performance is left behind!’
You and I both know that is utter bull, and that SoundExchange does not get complete track level reporting. I went around on this with John Simson once, and he told me that SoundExchange had always made it clear to the CRB that they had to rely on sampling, so whatever they said on the website was irrelevant, and that artists could always check the CRB filings to get the correct story. I have clients who point to that provision and ask why they don’t get paid for airplay they know they get on stations that only have to provide limited reporting. I should tell them that SoundExchange is lying when they say they report on track level data. That information has NEVER been accurate. What do you think I should I tell them? Why do you think SoundExchange is justified in giving clearly erroneous information?”
To which I responded:
“SX reporting on track level data vs. a sampling of data the vast majority of SX data *is* reported on track level data. In fact, 95% of the money distributed is based on census data. So the statement in absolute is not correct, but in practice, it is primarily correct.”
That was a very direct answer to your complaint, and I don’t believe it’s misleading. In your second post, you dug into my wording. It’s true, I did say 95% of the money distributed. My statement was to address *how* the money was distributed (which was your original complaint), not *how much*.
Since your second question is one that I would need to go back to SX with to confirm your numbers anyway (there are a variety of legitimate reasons for monies not being distributed from past periods, not all related to unregistered artists, and I suspect you may not have this information), I am going to instead turn that question back to Laura and let her respond.
Small Webcasters / Internet Radio
There’s a mistake in your post (re-read it above) in this section. Not sure if you meant to say more than you did, but in any case I understand. From my position, sometimes attempting to increase revenue is the right position to take, and other times not. I believe the pureplay work that we did was a step in the right direction.
As far as the “one size fits all” approach working or not working, no it doesn’t always work. Some rate policies affect artists and indies in a different way than they affect the majors. It’s a balancing act, and it does not always work out exactly the way I’d like to see. But I think what we came up with is a good compromise. Whether or not doing away with the retroactive “death penalty” would be a good idea, or not, is a good discussion to have.
Metadata
I didn’t say I was comfortable with the idea that artists who cannot become members might not have access to metadata, and I understand your points about paying half or whatever percentage it turns out to be. This is a point for discussion, one I’ll think about further, and sort out what others think about this as well. Perhaps there’s an answer, let’s see what it could be. But thank you for raising it.
To the extent that the recommendations of my committee are considered or adopted (the committee that hasn’t met yet, so it’s still early days), I want to address as many potential negatives up front as possible, so what we determine to be the best course of action will have the greatest likelihood of success.
Below are the posts to date »»»
- Fred Wilhelms to Dick Huey - November 18, 2009
- Dick Huey to Fred Wilhelms - November 17, 2009
- Wilhelms, Huey, SoundExchange exchange - October 19, 2009
- Dear Dick Huey - October 8, 2009
- Has SE`s Dick Huey gone missing? – July 12, 2007
- SoundExchange’s Huey to Wilhelms – July 5, 2007
- SoundExchange’s Huey v Fred Wilhelms – July 3, 2007
- SoundExchange: making up numbers – June 28, 2007
Stay tuned.
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(If you don`t fancy online payments, please email me at p2pnet @ shaw dot ca and I`ll send you my snail-mail address.)
November, 2009
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Specifically, this is what you said:
SX reporting on track level data vs. a sampling of data the vast majority of SX data *is* reported on track level data. In fact, 95% of the money distributed is based on census data. So the statement in absolute is not correct, but in practice, it is primarily correct. And it`s possible that that the sampled 5% disproportionately affects both the artists you represent, and the artists (and labels) I represent. So naturally, I`m interested in getting to 0% sampled data, which is one of the reasons I`ve established the metadata committee to review the feasibility of providing software to get past the inherent difficulties small webcasters (especially schools) face in reporting. I expect this committee to get into the trenches of this issue, and I welcome all opinions and suggestions in order come up with the best possible recommendation to the full board.
This is the line that jumped out at me: In fact, 95% of the money distributed is based on census data. 95% is a great number, and it certainly looks like SoundExchange is doing a great job in getting that all that money out, but this statement is patently misleading, because that great percentage is based on money distributed. The problem with SoundExchange isn`t the money distributed, it`s with the money NOT distributed. That`s the money that`s building up in that investment account to the tune of nearly $200 million as of the end of 2008.
And there`s a whole other layer to the rotten onion of that bogus statistic that SoundExchange`s own data exposes. In filings with the CRB in May of this year, SoundExchange acknowledge that, as of March, 2009, it still hadn`t distributed 32% of the collected artist royalties, and still hadn`t even allocated over 16% of that money for money received for the calendar year 2006. Over twenty-seven months AFTER the end of the reporting period, one dollar in every three that artists were entitled to was still sitting at SoundExchange, and SoundExchange still didn`t know who was entitled to half of that. You can`t foist that off on sampling problems, and that 95% figure becomes a whole lot less impressive when you realize it`s 95% of a number that is far less than what SoundExchange should have paid out.
And before you explain this away as one bad year, the same filing says that, for 2007, you still don`t know who was entitled to 25% of the artist money, and you still hadn`t paid out over 40% of the artist money, 15 months after the end of the reporting period. For the first quarter of 2008, after one whole year, you still hadn`t identified the proper recipient of nearly one-third of the artist royalties, and you had paid out LESS THAN HALF. So, to put your claim of 95% payment in the proper context, for the first quarter of 2008, after one year, SoundExchange had paid out 95% of 48% based on census data. In this light, the number is not as impressive as you wanted it to sound, is it?
This is the problem with SoundExchange`s attempt to hide what it does from public scrutiny, Mr. Huey. Sometimes the real data comes out, and the attempts to hide are futile.
So, I really don`t need the official communication outlets of SoundExchange to put a spin on these numbers. I can read them myself, and they leave me with only one question for you;
Do you think not paying out 32% of artist royalties after 27 months is doing a good job?
P.S. I heard from a friend of mine who read your last response and got a real kick out of your claim that SoundExchange is not beholden to the RIAA in any way. He reminded me that during the last Webcaster rate setting hearings before the CRB, SoundExchange`s counsel held repeated strategy sessions with RIAA counsel, in the open, right in SoundExchange`s office. Now, of course, the RIAA had absolutely no standing to participate in those hearings directly, so do you really think SoundExchange was acting independently or taking marching orders? Did the independent Directors have a representative at the meetings? How about the artists? Were they represented? If you knew about this, why did you leave the SoundExchange strategy up to the RIAA? And if you didn`t know about it, does it make you wonder what else you don`t know?
You see, Mr. Huey, the same thing keeps happening over and over. SoundExchange people like you say one thing, and the things we can see with our own eyes say differently. Who are we supposed to believe?
November 26th, 2009 at 11:57 pm
I’ve been reading these exchanges and I am compelled to kick a few words in here. Dick, Fred, thanks for keeping them up.
Dick, please don’t miss the 800lb gorilla in the room here: SE started within the RIAA, is staffed by many ex-RIAA’ers (key of which is counsel) and apparently still keeps the RIAA folks closeby when crafting policy. RIAA’s pissed off so many people across the board that you can’t *possibly* miss why this is a sticking point with a lot of people. So you can nitpick semantics if you want but until that SoundExchange-RIAA tightness goes away, SE’s going to be seen as nothing but a proxy. And this is a sticking criticism with a lot of people.
Let me throw this out: If SoundExchange really cared about helping artists they’d take a majority chunk of that leftover unclaimed money and just donate it to, say, the FMC so they can use it for their artist healthcare initiatives. Pick any of the many other worthy artists causes out there. But just take a break on those yearly raises for the SE execs (seriously, in this economy that bordering on vulgar) and scale back all that money going to PR firms and just actually *give that money to people that actually do good things for artists*. Put it to a vote. Let all your members pick the charities and vote on who gets what. But make sure it gets to the artists – and not absorbed by SoundExchange.
And with all due respect to Laura we don’t need a strategic comminucations/PR flack in here handing out talking points. This conversation started with you, Dick, and it turned into something that (while sometimes heated) benefits everybody. But if you can’t answer a question on numbers, go get the data people, the folks who have been at SE for the long haul and actually do the math and distributiuons. And either bring *them* into the discussion or get the info yourself and come back with an answer. But please don’t pull a fresh PR person out of the hat and expect anybody to take them seriously. Once you bring in the hired talkers you can be guaranteed to watch this discourse die.
Me, I’d prefer to keep hearing from a boardmember curious and decent enough to engage with people outside of SE on these questions, and who might care enough to keep working on making the current system into something better.
December 3rd, 2009 at 11:39 am
Hi there, whoever wrote “let’s interrupt the bickering for a moment”.
Thanks for your note. I’m just seeing this, have to admit because there are so many different threads/posts on this topic, I’m not always catching new posts, and I don’t get notified when new posts show up.
I do understand the 800 lb. gorilla in the room. I completely understand why it’s a sticking point for so many people. And I respect why artists and independents do not want to feel like the organization that represents their interests is run by an organization of which they are not part. All that said, agreed, SX started within the RIAA, and there are many RIAA members still on the board as might be expected. Those RIAA members make up a huge percentage of the music market, so it’s not practical or possible, or even desired, to not have them involved. The result of their involvement is that, when something like the small webcaster settlement goes through, it applies broadly, not just to independents and artists. I think you would be surprised to hear the extent to which some of these members are willing to think outside the box – not in every instance – but more than you’d suspect. And I also think that the artists, and independents, are very focused on leveling the playing field and responding to some of the criticisms that I’ve seen on this message board and at the Pho list. This will continue to be a work in progress.
I take your suggestion about the unclaimed monies. It’s not the first time I’ve heard it, and I think the idea is interesting. I’m not in a position to do anything other than say that I hear where you’re coming from, and will discuss this suggestion with others as I prepare for the next board.
And I also believe every board member, as well as the organization itself, will be looking closely at expenditures.
As far as Laura is concerned – true, she’s part of the PR team. There’s no question that SX has talking points, like any other organization. But let’s not pre-judge what she says here. I believe that SX has now, between herself and Bryan Calhoun, some good thinkers that I hope will not just respond with press release-speak.
I value this conversation, and hope to hear from more of you with your thoughts and suggestions. Keep them coming.