Wall Street ‘Panic Index’ Surges on Monday — Right Before Spotify Goes Public

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Did Spotify choose exactly the wrong day to go public?

If timing is everything, then there’s everything wrong with the date Spotify chose to go public.  On Monday, panicked traders triggered another giant selloff, with Amazon leading the scary downturn.   On Tuesday, April 3rd, Spotify goes public on the New York Stock Exchange in a risky ‘direct listing’.

Just last week, President Trump started Twitter-blasting the e-commerce giant, sending its shares southward.  Trump stepped up the pressure with more illogicalities on Monday morning, all of which further punished AMZN shares.

But other tech stocks were also part of the bloodbath on Monday, including Intel, Facebook, Microsoft, Tesla, and Netflix.

And tech stocks weren’t the only ones bleeding.  Expectedly, China quickly retaliated against U.S. tariffs by slapping their own import fees on items like pork and fruit.  That could represent the beginning of a global trade war, and a period of giant uncertainty ahead.  Companies like Tyson immediately felt the bite.

It’s now a familiar downturn.  Q1 is now the first losing quarter since 2015, with CNBC declaring a ‘tanking market’ while market experts called for continued plunges this week.

MarketWatch’s Mark DeCambre even pointed to a rising panic index, called the Arms Index, citing FactSet data. “The Arms Index was at its highest since on the NYSE… approaching its highest level since February 5th, when the markets saw another sharp descent,” DeCambre relayed.

Into that quicksand enters Spotify, already an iffy tech bet with debatable financials.

Of course, bullish Spotify investors are pointing to the greatest investment since Amazon in the 90s.  But a suddenly risk-averse market could punish Spotify badly, especially given the absence of supporting investment banks to boost the stock.

In fact, investment banks, deprived of their typically plump commissions, may have every incentive to punish Spotify’s coming out.  After all, the last thing high-paid investment bankers want is a rash of non-IPO’ing companies.

Other risks abound.  Spotify employees, for example, can dump their shares on day one, instead of being restricted by a lockup period.   “Spotify’s direct listing piles risks upon risks,” declared Reuters’ Jennifer Saba.  “The music streaming service’s market debut was unusual already – but it comes as specific fears over Facebook and Amazon are spilling over into wider tech valuations.”

In other words: get ready for a wild ride.  Maybe Spotify wins, maybe they don’t.  “With Spotify, both the price and the number of shares are up for grabs,” Saba noted.

“Almost all the shares could trade on day one – or very few could.”


Photo snapped at Caleb’s in Kansas City by Dean Hochman (CC 2.0).  Written while listening to Bad Bunny.

13 Responses

  1. Sad Paul is sad

    Haha you are such a sad individual Paul.
    The short term market swings don’t matter for Spotify because they’ve over a billon dollars in cash and no debt, and they’re not selling stock or raising money through the direct listing either.

    Keep talking shit, Spotify proved you wrong for years and will continue to do so.

    • Remi Swierczek

      Post you name Ek’ ass kisser! The biggest BLUFF on Wall Street will unroll tomorrow!
      I give 36 moths for flames to become complete ashes.

      Ek’s proven business model CANNOT feed music industry (the old hungry one with legal rights) musicians, song writers and SELF.
      NUMBERS WILL NEVER ADD UP – sorry – just big bonus to some folks in the middle of UMG created streaming and advertising music industry SUICIDE!

  2. Greed is GOOD

    Uh huh. But people actually have to buy the shares.

    $150! Yeah right.

    Traders know this is a blood bath.

  3. noob

    alrite bro, can anyone explain to make how will spotify earn money from this listing ?? Cuz then their shitty ‘profits’ cough cough I mean losses would be less killah…

    • noob

      will these spotitrolls (they pay awful, so the value of music is as worthless as youtube listening) earn moneys every month from this or it’s a lump sum profit.

      Fakas from sweden …

  4. SELL

    NYSE is not for amateurs.

    Should Daniel Ek also get to fly the plane? After all the “pilot” only “artificially controls” the “direction” not the “real value” of the flight.

    Word to the wise: If you own Spotify Shares SELL THEM A.S.A.P. or get Bitcoin’d.

  5. Lest it be overlooked...

    Everything that happens once can never happen twice. But everything that happens twice will surely happen a third time.” ~Paulo Coelho, The Alchemist

    There are potentially 1.125 trillion plus reasons why the proposed Spotify/NMPA Settlement Agreement may not be the best way to go, but don’t ask David Israelite, president and CEO of the National Music Publishers Association (NMPA) because, well, uhm, …

    “Nearly four years ago, an executive of Spotify … James Duffett-Smith, the company’s head of licensing business affairs, said it was not always ‘possible or economically feasible to identify each co-author of a copyrighted musical work.’”

    See, e.g., David Lowery, et al., v. Spotify USA Inc., Case 2:15-cv-09929-BRO-RAO, filed December 28, 2015: Musical Works: Exhibit “C”, pp. 24-26:



    It was noted by DMN commentator “G.K.” concerning ISNI numbers via DMN article – “Alert: YouTube Is Consolidating All Artist Fans Into ‘Official Artist Channels,’” that, to paraphrase, in part:

    1. For decades, composers, lyricists and music publishers have used the IPI/CAE numbers, … which they get from their PROs (ASCAP; GEMA; SACEM; SIAE; PRS; etc.).

    2. For nearly two decades (though applied retroactively), each musical composition, including any accompanying words, received a unique ISWC number (International Standard Musical Works Code), identifying that particular musical work as well as the “title, authors and composers.” Within the ISWC system, every musical work is assigned its own ISO standard unique identifier number. The ISWC system is built up as a network of decentralized databases that are a part of the main database, that is to say, the CISAC’s Works Identification Database (WID). Each musical composition, including any accompanying words, was allocated an ISWC number by “authorized” ISWC agencies, usually a PRO (ASCAP; GEMA; SACEM; SIAE; PRS; etc.).

    3. A featured recording artist (performer) and/or “the sound recording copyright owner (SRCO),” that is to say, “a person who owns the master recording to recorded artistic content,” may register with Soundexchange (for non-interactive digital transmissions) in the U.S. to receive royalty payments that may be due or a similar organization in other countries (PPL in the U.K.; GVL in Germany; etc.). Furthermore, if not prominently featured on a track or album, royalties for non-featured recording artists such as a session or a back-up vocalist are covered by collective management organizations (CMOs) such as the AFM and/or SAG-AFTRA (a third-party administrator). “The SCAPR International Performer Database (IPD) … has proven to be a valuable resource in identifying participants as well, as the database was established to provide a unique International Performer Number (IPN) for each performer worldwide.” The IPN is used to identify a performer with other collective management organizations (CMOs).

    It should be noted that the “authority” to identify each recording artist (performer) as such comes from the legal mandate “the performer” has assigned to their collective management organizations (CMOs) – whether the delegation of that “authority” was rightful or not might be determined by contract language per se, or otherwise by reasons such as lack of legal counsel, the ineffective assistance of legal counsel and relevant constitutional considerations, or a combination thereof.

    4. For decades, the sound recording of a musical composition, including any accompanying words, was assigned a unique ISRC number (International Standard Recording Code) that identifies those performing artist(s) and record label(s).

    Most if not all of these codes have existed for decades and are a system through which composers, lyricists, publishers, performers and labels collect royalties.







    As reported by the Hollywood Reporter, “Spotify does pay for the performance of compositions, via blanket licenses obtained from ASCAP and BMI,” and further, that, “[i]n the past, Spotify has acknowledged lapses in obtaining mechanical rights due to the difficulty of identifying and locating the co-authors of each of the tens of millions of copyrighted musical works throughout its streaming platform.”


    What difficulty? If Spotify had actually paid for the performance of copyrighted musical compositions, via blanket licenses obtained from ASCAP and BMI, it appears that the solution for resolving that so-called “difficulty” was for Spotify to have the PRO, where, in practice, the copyrighted musical compositions are first registered, identify the authors and co-authors of those copyrighted musical compositions vis-à-vis their unique ISWC numbers. It appears that the PROs would be the obvious “go-to-place” in such circumstances in order to obtain such information in that the “publishing industry hasn’t enjoyed the fruits of direct deals.” I mean, like, where did Spotify first go to obtain those performance blanket licenses—Walmart?

    Please note that all reference made herein to PROs (also includes SESAC and GMR).

    Spotify, however, reportedly has a sordid history of “not properly paying publishing revenues … in blatant violation of US Copyright laws,” as reported by Rolling Stone, quoting Victory Records in 2015. There have been other reports as well.





    If Spotify could reasonably ascertain the identify of the authors and co-authors of those copyrighted musical compositions vis-à-vis their unique ISWC numbers, among other things, why then was it so “difficult” when it came to identifying the very same authors and co-authors for purposes of the mechanical reproduction (copying) of those copyrighted musical compositions?

    Why the need for “address unknown” NOIs? If a NOI could not be sent out and payments made for a particular copyrighted musical composition, or otherwise, because there were no available means by which to ascertain the identity of the authors and co-authors of that particular copyrighted musical composition, or otherwise, why then did Spotify pay the PROs⎯oh wait, they didn’t pay the PROs (or anyone else for that matter), they simply kept all of those so-called “NOI payments” in their “treasure chest,” subsequently dubbed the “reserve fund” (kind of sounds like the proposed Music Modernization Act (MMA) “black box” process doesn’t it – oh snap, Spotify is a huge supporter of the MMA, go figure)?

    Another question that comes to mind as it now appears that SoundExchange has so “graciously” published 60 million plus NOIs is:

    Among other things, on which dates were each and every one of those NOIs (“address unknown” or otherwise) actually filed, meaning, only after the issue was first brought to Spotify’s attention or prior to making countless mechanical reproductions (that is to say, countless duplicate copies)? My best guess, and a reasonable inference is that a cursory check will show that there was a significant increase in the number of NOIs filed subsequent to the Spotify and Victory Records “scandal,” which, if memory serves, was settled behind closed doors. My next best guess would place that number around 60 million or so, but that is just a guess, could be higher, could be lower⎯it’s not like I am the Inspector General, sheesh!

    “Remember, the address unknown NOI is only available if the copyright owner is not identifiable in the public records of the Copyright Office.”

    Whether or not the address unknown NOI, or otherwise, is available is a secondary consideration in that the availability of either NOI, that is to say, the compulsory license under Title 17 U.S.C. § 115 is contingent upon (a condition precedent) the existence of a “copyright owner(s).” Firstly, if a work is not identifiable amongst those works enumerated under Title 17 U.S.C. § 102 then it is not copyrightable. For example, if the work is “jufdvccvnn.” Furthermore, if a work is of the kind enumerated under Title 17 U.S.C. § 102, for example, and it is neither copyrighted nor lawfully or validly copyrighted, it stands to reason that there is no “copyright owner(s)” for that work, therefore, the NOI is unavailable, that is to say, the Title 17 U.S.C. § 115 compulsory license.

    Otherwise stated, and irreducibly so: No initial consent, no copyright owner.

    If, for example, John Q. Public, Jane Q. Public, Jane Doe and John Doe collaborated to create a musical composition, but Jane Doe decided not to release her contribution in the work; John Q. Public, Jane Q. Public and John Doe “copyrighted” the work anyways, and subsequently “registered” the work with a PRO, let’s say, SESAC, or even ASCAP, for example, and say the work found its way onto the Spotify streaming platform, do you first ask whether the “copyright” is lawful or valid, or whether the “blanket license” of a music publisher, record label or PRO to perform the work is lawful or valid, or whether or not an address unknown NOI or otherwise was sent with payments, or do you go directly to the DOJ?

    If, for example, Jane Doe did not release her contribution, is there an exclusive right in that musical composition? If there is not an exclusive right, is a DMCA take-down-notice available with respect to that musical composition? If it is shown that DMCA notices have been served with respect to that musical composition, what are the consequences (especially, if monetary demands have been made in conjunction with the same)? If that is the case, who would Jane Doe inform? What if, Jane Doe…?


    In one hand (the hand with the two-inch thick calluses), the question that begs to be asked and answered is: Who is actually responsible for uploading a copyrighted “particular performance of a copyrighted musical composition (song)” to Spotify?

    In the other hand (and more significantly), the question that begs to be asked and answered is: Who is actually responsible for uploading an un-copyrighted performance of an un-copyrighted musical composition (song) to Spotify?

    There is yet another question that begs to be asked and answered, nevertheless, that question will remain a mystery … for now.

    Before moving forward, however, I must make mention of one salient fact that does not make any sense (though there are others) in Spotify’s so-called “explanation” as to why it did not obtain mechanical reproduction (copy) rights before making countless mechanical copies over the years (like a mindless Xerox machine on steroids). Specifically, Spotify did not state that they could not identify and locate the authors of those copyrighted musical works (that is, the copyrighted musical compositions, including any accompanying words); instead, Spotify stated that they failed to obtain mechanical reproduction (copy) rights due to the so-called “difficulty” of identifying and locating the ”co-authors” “of each of the tens of millions of copyrighted musical works throughout its streaming platform.”

    See my comment (“Lest it be overlooked…”) in “I’m One of the Attorneys Suing Spotify. And Here’s Why the ‘Music Modernization Act’ Makes Little Sense,” quoting, in part, Flo & Eddie, Inc. v. Sirius XM Radio, Inc., 62 F.Supp.3d 325 (S.D.N.Y. 2014).


    If that is a true statement, why then did Spotify fail to serve the requisite NOIs upon, and withhold accounting and payments to the known authors (and the known “co-authors,” if any) of those copyrighted musical compositions, (that is to say, those musical compositions, including any accompanying words, which had been sold and duly registered with the U.S. Copyright Office, for example) before making countless mechanical reproductions (copies) thereof?

    Why not make due diligence inquiries of either the U.S. Department of Justice, the U.S. Copyright Office, the PROs (and, though not mentioned in the above Hollywood Reporter article, including, SESAC and GMR), the music publishers, the record labels and, if all of the aforementioned entities are absolutely clueless and stupefied as to the identity and location of the “co-authors,” why not ask one of the known authors (or known “co-authors,” if any) of those copyrighted musical compositions to identify the unknown “co-authors,” if any, and their contact information, if known?

    [I of VI]

    • Anonymous

      Thanks for this. I have a couple comments.

      – The PRO databases aren’t as comprehensive as people think they are. There are millions of songs where you won’t be able to find out who the songwriters and publishers are by going to the websites of ASCAP, BMI, SESAC, GMR and the foreign collectives. The labels should have that publishing information, but they often don’t. It doesn’t justify Spotify making the songs available without a license, but it is true that it is often difficult to identify who the publishers are, and many don’t have ISWC codes assigned.

      – Every single song on Spotify is copyrighted. It is not required to register a song with the Library of Congress in order for a song to be copyrighted. Any song that is fixed in some tangible form (handwritten lyrics, sheet music, wave or MIDI files on a hard drive, etc.) is copyrighted. There is no such thing as an “un-copyrighted” song, with the exception of those songs that solely exist in someone’s head.

      • Lest it be overlooked...

        Thank you for your comments.

        As for your first comment, I agree with your statement that “[i]t doesn’t justify Spotify making the songs available without a license,” i.e., prior consent, for those reasons, among others, which was the reason for this post, and others.

        The world is already aware that Spotify has engaged in private trading of shares of Spotify stock and recently conducted a “direct public listing,” but let me state this:

        Davis v. Blige, 505 F.3d at 99 (applying “in the copyright context[,] the venerable principle of the law of property that, while an owner may convey any of his rights to others permanently or temporarily, he may not convey more than he owns,” and holding that “when the co-owners granted rights to a music publisher, they could but transmit what they had to part with, and they could not transfer what the other co-owner had” (internal citations omitted)).

        That “venerable principle of the law of property” can be found in Maurel v. Smith, 271 F.211, 214 (2d Cir. 1921).

        As for your second comment; firstly, let me clearly state for the record that I vehemently disagree with your assertion that every song on Spotify is copyrighted. It goes without saying, but I do, that that has been my adamant position for a number of years now for a number of reasons (some of which are herein stated).

        I also want to quickly reply to your further statement that “[t]here is no such thing as an ‘un-copyrighted’ song, with the exception of those songs that solely exist in your head.” As set out below, there is in fact a difference between a mere medium and a medium of expression. As I have already addressed that particular point, I will simply ask that you read further, thank you.

        Importantly, however, as I am neither a lawyer nor a constitutional scholar, I simply suggest that you contact the experts at the U.S. Copyright Office or the Library of Congress and explain to them that there is no such thing as an “un-copyrighted” (yes, I am aware that there is in fact no hyphen in the word “uncopyrighted,” but there is a reason why it is there) song in that one of the examples set out in 37 C.F.R. § 380.2, states exactly that:

        (1) A performance of a sound recording that does not require a license (e.g., a sound recording that is not copyrighted);


        Again, I thank you for your comments.

  6. Lest it be overlooked...

    Spotify must have failed to serve the requisite NOIs upon, and withheld payments to, the known authors (and known “co-authors,” if any) of those copyrighted musical compositions, otherwise the NMPA would not have had to initiate a court action to enforce compliance and subsequently negotiate a “settlement” (yet to be approved) with Spotify on behalf of its member publishers (who have not yet opted out)?

    If the Spotify and NMPA settlement is approved, does that mean that all of the authors (and known “co-authors,” if any) of those copyrighted musical compositions have already received full payment for past transgressions (particularly, those member publishers represented by the NMPA that have not yet opted out), and that the “reserve fund” that has been accumulating and, dare I say, is still accruing in the Spotify “treasure chest,” is being held for the remaining “unidentified co-authors” of those copyrighted musical compositions who did not receive a portion of the yet to be approved $43 million settlement? Surely, if neither Spotify nor the NMPA and its member publishers know the identity of the “co-authors” of those copyrighted musical compositions (because they neither represent nor license their interests, obviously, otherwise the PROs would have set aside those payments⎯do I understand this correctly?), they are not entitled to any of the proceeds accumulating in the Spotify “reserve fund” for those “co-authors” who could not be served with NOIs “due to the difficulty of identifying and locating them.”

    Where were all of the record labels that own an equity stake in Spotify while all of this unauthorized copying was going on? What of the RIAA? My gosh, by Spotify’s own admission, there were blatant and countless copyright act violations being committed for years in the RIAA’s own backyard and nary a word was spoken of it (do as I say, not as I do?). “Poop,” had it been a 14-year-old child from Mississippi making a “mix-tape” for his or her schoolmates, they would have strung that child up from the yardarm (and his or her parents too) but not before first branding the Rightscorp trademark into his, her or their foreheads, and thereafter burned all of the bodies! Not to mention, but I do, that they would have made (or at least would have liked to have made) indentured servants of the surviving members of that child’s family (if any) for at least a generation or two (maybe three, lol)! I did not make mention of the confiscation of the “family farm,” “family tractor” and “family name” as I figured everyone would know that was a given in view of the reported history of, inter alia, the many forfeitures and seizures⎯by default or otherwise.




    But seriously, if the musical composition, including any accompanying words, is copyrighted, it must have been sold at one time or another (“publication in accordance with the statute”), for example, and registered with a PRO, a music publisher or at the U.S. Copyright Office? If not, why then were there so many complaints of non-compliance with Section 115 (not to be confused with section 114)? Why were there so many news reports of Spotify and its current owners (the 3 major record labels, and those represented by Merlin, for example) potentially incurring a civil liability of $150,000 for each and every willful infringement (mechanical copying) of those musical compositions in the absence of a duly served NOI? Unless, of course, those news reports are, wait for it … “fake news?” The questions as to whether or not such sales, for example, and registrations were duly authorized obviously remains outstanding, but perhaps the “co-authors,” if any, will know the answers to those questions.


    That said, what of the un-copyrighted musical compositions, and un-copyrighted “particular” performances of an un-copyrighted musical composition (song)? What of an un-copyrighted “particular” performance of a copyrighted musical composition (song), for that matter? If Spotify actually had absolutely no idea whatsoever as to whose material was streaming through its streaming platform, in whole or in part, as it appears it has claimed [*], why pray tell did Spotify knowingly arrogate to itself the right to stream performances of that “unidentified” material and willfully make mechanical reproductions (copies) thereof without first obtaining permission to do so?

    [*] If one carefully considers what was claimed, stated and reported by Spotify, and others, given the use of the term “copyrighted musical work,” it appears that there has been and continues to be some confusion or overlap between a copyright in a “musical composition,” specifically, “the work” and that “different animal,” that is to say, a “copyright” in the “particular performance of a musical composition (song)”, but I could be mistaken⎯perhaps. That “confusion,” if it be confusion (not here referring to, of course, the confusion that actually exists between a copyright and a patent), would provide a plausible explanation for the inexplicable, that is to say, the case of the “unknown co-authors,” because there are no “unknowns” with regard to a typical copyrighted musical composition, including any accompanying words (reference the ISWC, for example).

    See, for example: 17 U.S.C. §§ 501 and 506; 18 U.S.C. § 2319; see also:
    Broadcast Music, Inc. v. Columbia Broadcasting System, Inc., 441 U.S. 1 (1979) (“Of course, a consent judgment, even one entered at the behest of the Antitrust Division, does not immunize the defendant from liability for actions, including those contemplated by the decree, that violate the rights of non-parties.”).


    It is quite probable, indeed likely, that there are “particular performances” of both copyrighted and un-copyrighted musical compositions that are not licensable by either the PROs, SESAC and GMR, the music publishers or the record labels that Spotify has, by its own admission, streamed and mechanically reproduced (either with or without permission), but has not paid for (in either case), which might explain Spotify’s new-found “respect” for the “particular performances” of “remixers,” and Facebook’s 60-day deadline rush to enter into direct licensing agreements with “indie artists” and “self-published songwriters” on its platform, for example, both, as recently reported by DMN, and others.




    In 2014, the Department of Justice (DOJ) was “considering whether the consent decrees may properly be interpreted to require ASCAP and BMI to license 100 percent of the rights required to publicly perform [musical compositions] in their respective repertoires, regardless of whether the work is wholly or only partially owned by the member (or members) of the PRO in question,” in stark contrast to “fractional licensing.

    On May 23, 2014, in its comments submitted before the U.S. Copyright Office, Spotify noted, inter alia, at pp. 35-37 (¶ 6), relying on the Section 114 statutory license such as is utilized by Pandora Media, Inc., by way of comparison, that “under the Section 114 statutory license, the CRB established royalty rates only on a per performance basis,” and 37 C.F.R. § 380.2, which states that:

    “A ‘performance’ is defined as ‘each instance in which any portion of a sound recording is publicly performed to a listener by means of a digital audio transmission (e.g., the delivery of any portion of a single track from a compact disc to one listener) but excluding the following:

    (1) A performance of a sound recording that does not require a license (e.g., a sound recording that is not copyrighted);

    (2) A performance of a sound recording for which the service has previously obtained a license from the Copyright Owner of such sound recording; and….”



    17 U.S.C. § 201(c) of the Copyright Act, states, in pertinent part:

    “Copyright in each separate contribution to a collective work is distinct from copyright in the collective work as a whole, and vests initially in the author of the contribution.”

    In short, even if a duly authorized agreement were struck at this very moment between those parties (whether such be those that have opted in, or those that have opted out of the Spotify settlement, if approved, with the NMPA and its member publishers); and the innumerable non-parties, that does not preclude suit for infringement occurring prior to “assignment.” From “whack-a-mole” to “cat and mouse,” do you see the irony here? See, e.g., R & R Recreation Products, Inc. v. Joan Cook Inc., 1993 WL 88171, * 4 (S.D.N.Y. 1992) (“R & R’s assignment of the cat and mouse copyright to DMV does not preclude suit by R & R for infringement prior to assignment. *), quoted with approval in, Tasini v. New York Times Co., 972 F.Supp.804 (S.D.N.Y. 1997); see also, e.g., Davis v. Blige, 505 F.3d 90 (2d Cir. 2007); PRO Licensing of Jointly Owned Works: Potential Infringement and Other Claims (Part 5), at pp. 22-23:

    “24. What are the penalties for an infringement of copyright?

    a) the actual damages suffered plus the infringer’s profits that were attributable to the infringement[;]

    b) ‘statutory damages’ in an amount between $750 and $30,000 (or up to $150,000 if willful infringement is found), as the court considers just. The U.S. Supreme Court has ruled that the amount of statutory damages is to be decided by a jury.”




    https://www.bmi.com/creators/detail/533748 [note] numbered paragraph 25.


    Title 17 U.S.C. § 102. (Subject matter of copyright: In general), states, that:

    Copyright protection subsists, in accordance with this title, in original works of authorship fixed in any tangible medium of expression, now known or later developed, from which they can be perceived, reproduced, or otherwise communicated, either directly or with the aid of a machine or device. Works of authorship include the following categories:

    (1) literary works;
    (2) musical works, including any accompanying words;
    (3) dramatic works, including any accompanying music;
    (4) pantomimes and choreographic works;
    (5) pictorial, graphic, and sculptural works;
    (6) motion pictures and other audiovisual works;
    (7) sound recordings; and
    (8) architectural works.

    (b) In no case does copyright protection for an original work of authorship extend to any idea, procedure, process, system, method of operation, concept, principle, or discovery, regardless of the form in which it is described, explained, illustrated, or embodied in such work.


    At the risk of stating the obvious (this being a website for music industry experts and professionals; and others), it is noteworthy that there is a crucial difference between a mere medium and a “medium of expression.” For the sake of brevity, “in accordance with this title,” that is to say, Title 17 of the United States Copyright Act, copyright protection subsists in a “medium of expression.”

    Accordingly, to say that reworking musical compositions into piano player rolls is problematic is an understatement (see, e.g., Baker v. Selden, infra) ⎯copyrighted “particular” performances of a copyrighted musical composition (song), for example, were, for almost a century, assembled in collective works (as a whole) styled “record albums,” which were reproduced (106(1)), packaged, distributed (106(3)) and sold (“publication in accordance with the statute”) as such (that is to say, as part of that particular collective work; the first particular collective work being, of course, the musical composition, including any accompanying words) adorned with cover art, track lists (usually numbered), song lyrics, songwriter and co-songwriter credits, performing artist credits, recording artist credits and producer credits, photographs and biographies depicting the artist or group, music publisher and record label information and, of course, branding, among other things. Those record albums (collective works) were exploited and conversions or “transfers” were subsequently made from one medium to another.

    [II of IV]

  7. Lest it be overlooked...

    The issue between Spotify and the NMPA and its member music publishers (that have not yet opted out) appears, at first blush, to pertain exclusively to publishers of copyrighted musical compositions, including any accompanying words (which, for the most part, if not in all instances, were first fixed in a tangible medium of expression known as, wait for it … paper, and published in the form of sheet music in staff notation, including any accompanying words⎯sometimes referred to as song lyrics), and the “unknown co-authors,” an apt comparison can be found in New York Times Co. v. Tasini, 533 U.S. 483 (2001), wherein, the Supreme Court clearly explained, among other things, that there is indeed a difference between a mere conversion from one medium to another of published “intact editions of periodicals” to microform, without more, so as not to alter the character of that work for copyright purposes,” and, for example, “re-composing” a copyrighted musical composition, at pp. 501-502:

    “In short, unlike microforms, the Databases do not perceptibly reproduce articles as part of the [*502] collective work to which the author contributed or as part of any ‘revision’ thereof. [Note omitted.]

    Invoking the concept of ‘media neutrality,’ the Publishers urge that the ‘transfer of a work between media’ does not alte[r] the character of that work for copyright purposes. Brief for Petitioners 23. That is indeed true. See 17 U.S.C. 102(a) (copyright protection subsists in original works ‘fixed in any tangible medium of expression’). But unlike the conversion of newsprint to microfilm, the transfer of articles to the Databases does not represent a mere conversion of intact periodicals (or revisions of periodicals) from one medium to another. The Databases offer users individual articles, not intact periodicals. In this case, media neutrality should protect the [Freelancer] Authors’ rights in the individual Articles to the extent those Articles are now presented individually, outside the collective work context, within the Databases’ new media. [Note omitted.]”

    https://www.courtlistener.com/opinion/118457/new-york-times-co-v-tasini/; see also, e.g.; and,


    “The ‘mechanical’ right is the right to reproduce a piece of music onto CDs, DVDs, records or tapes. (Non-mechanical reproduction includes such things as making sheet music, for which royalties are paid by the publisher to the composer.)”


    Though the Supreme Court in New York Times Co. v. Tasini, supra, at Note 5, “neither decide[d] nor express[ed] any view on whether the 201(c) ‘privilege’ may be transferred[,]” it is not without considerable import that the natural meaning of “inalienable” elucidated in Merriam-Webster’s Collegiate Dictionary (Tenth Edition), at p. 585, is, in pertinent part, as follows:

    “Inalienable: incapable of being alienated, surrendered, or transferred .”

    If a “co-author” is in fact unknown, as Spotify has reportedly claimed, then it is well within the realm of reason to conclude that a “co-author’s” contribution could not possibly be a “work made for hire,” a fortiori, a music publisher and record label could not therefore be “treated as the author”⎯do I understand that correctly?

    Community for Creative Non-Violence v. Reid, 490 U.S. 730 (1989), the United States Supreme Court determined that employees for purposes of “work made for hire” are defined under “the conventional master-servant relationship as understood by common law agency doctrine.” Be that as it may, agency requires agreement and consent between parties that one will act on behalf of another and subject to another’s control.



    I would be remiss, if I did not briefly mention that Spotify reportedly commissioned “servants” in the past, but in that case, Spotify would obviously know the identity of the “servants” under its employ—but Spotify denied those reports.


    Though Spotify spoke with “remixer” Little Louis Vega as quoted in the DMN article referred to above, and linked to below, I am not yet certain as to what Spotify meant when it makes mention of “remixers.” Is Spotify referring to “remixers” “remixing” a “copyrighted musical composition” or a “particular performance of a copyrighted musical composition (song),” both, or something else? Perhaps Spotify will be kind enough to soon clarify what it actually means as inquiring minds want to know?


    Title 17 U.S.C. § 101 (Definitions), states, that:

    A work is “fixed” in a tangible medium of expression when its embodiment in a copy or phonorecord, by or under the authority of the author, is sufficiently permanent or stable to permit it to be perceived, reproduced, or otherwise communicated for a period of more than transitory duration. A work consisting of sounds, images, or both, that are being transmitted, is “fixed” for purposes of this title if a fixation of the work is being made simultaneously with its transmission.

    Therefore, in the case of a copyrighted work such as a musical composition, including any accompanying words, if an author has an “inalienable authorial right to revoke a copyright transfer” pursuant to 17 U.S.C. 203(a)(5), for example, is a music publisher’s or record label’s “authority,” in and of itself, “sufficiently permanent or stable to permit it to be perceived, reproduced, or otherwise communicated for a period of more than transitory duration[?]”

    See, e.g., https://www.courtlistener.com/opinion/112420/stewart-v-abend/ ; see, also, New York Times Co. v. Tasini, 533 U.S. 483 (2001), supra.

    Again, Title 17 U.S.C. § 102, states, that, “Copyright protection subsists, in accordance with this title, in original works of authorship fixed in any tangible medium of expression, now known or later developed, from which they can be perceived, reproduced, or otherwise communicated, either directly or with the aid of a machine or device.”

    It was further explained by the Supreme Court in New York Times Co. v. Tasini, supra, that: “Essentially, 201(c) adjusts a publisher’s copyright in its collective work to accommodate a freelancer’s copyright in her contribution. If there is a demand for a freelance article standing alone or in a new collection, the Copyright Act allows the freelancer to benefit from that demand; after authorizing initial publication, the freelancer may also sell the articles to others.”

    Because the “direct public listing” Spotify recently filed with the SEC has been the topic of much discussion, and is the subject of even more scrutiny, the following is extremely important for those that may not know (especially as today is the day):

    “Publication” as defined in Title 17 U.S.C. § 101, “is the distribution of copies or phonorecords of a work to the public by sale or other transfer of ownership, or by rental, lease or lending. The offering to distribute copies or phonorecords to a group of persons for purposes of further distribution, public performance, or public display, constitutes publication. A public performance or display of a work does not of itself constitute publication.

    To perform or display a work ‘publicly’ means⎯
    (1) to perform or display it at a place open to the public or at any place where a substantial number of persons outside of a normal circle of a family and its social acquaintances is gathered; or

    (2) to transmit or otherwise communicate a performance or display of the work to a place specified by clause (1) or to the public, by means of any device or process, whether the members of the public capable of receiving the performance or display receive it in the same place or in separate places and at the same time or at different times.”

    As a work is only fixed in a tangible medium of expression when its embodiment in a copy or phonorecord is authorized by or under the authority of the Author, some of the questions that necessarily must be asked and answered are, for example:

    (1) Who is the Author⎯is it the Author or is it the publisher? Put otherwise, are you the Master or the servant? (2) If an Author, for example, did not or does not authorize initial publication, is a copy or phonorecord a work “from which they can be perceived, reproduced, or otherwise communicated?”

    What of the so-called licenses and blanket licenses, purportedly “granted” by, among other things, the music publishers, the record labels and the PROs?

    It is also important to note that there is a most significant difference between a case based upon the First Amendment and case law such as Harper & Row Publishers, Inc. v. Nation Enterprises, 471 U.S. 539 (1985) and Feist Publications, Inc. v. Rural Telephone Service Co., 499 U.S. 340 (1991), exempli gratia; and, a case based upon Article I, Section 8, clause 8 and case law such as Baker v. Selden, 101 U.S. 99 (1879) and Mazer v. Stein, 347 U.S. 201 (1954), exempli gratia.

    “But there is a clear distinction between the book, as such, and the art which it is intended to illustrate.” Baker v. Selden, 101 U.S. 99, 102 (1879).

    “Copyright attaches to form of expression … if not only one form of expression, at best only a limited number, to permit copyrighting would mean that a party or parties, by copyrighting a mere handful of forms, could exhaust all possibilities of future use of the substance. In such circumstances it does not seem accurate to say that any particular form of expression comes from the subject matter.” Morrisey v. Proctor & Gamble Co., 379 F.2d 675 (1st Cir. 1967).

    With all due respect to those that have held otherwise, in accordance with the U.S. Constitution and Supreme Court precedence, copyright law should not protect the expression because it has “merged” with the idea.

    For example, Bleistein v. Donald Lithographing Co., 188 U.S. 239 (1903), upheld circus posters as copyrightable, but cautioned, that:

    “We shall do no more than mention the suggestion that painting and engraving unless for a mechanical end are not among the useful arts, the progress of which Congress is empowered by the Constitution to promote.”

    With that in mind, ask yourselves, what is a “particular” performance (the art) of a musical composition, including any accompanying words (the idea)?

    What then is a sound recording? Try and separate the “particular” performance from the musical composition, including any accompanying words (song).

    Who possesses the “exclusive right” if the musical composition, including any accompanying words (the idea) has merged with the performance (the art)?

    Is it the music publisher, the record label or neither?

    See my comment (“Lest it be overlooked…”) in “YouTube is Going to Repeatedly Stuff Ads In Your Face Until You Pay.”


    Therefore, I ask, who is actually responsible for uploading the “unidentified” material to Spotify? Was it “freebooters” or pirates? Was it a music publisher? Was it a record label? Was it an aggregator? Was it a composer? Was it a lyricist? Was it a recording artist (performers)? Well, if it was any of those just mentioned, it would not be “unidentified” material now would it⎯oh wait, unless, of course, it had been uploaded to Spotify by a “freebooter” or a pirate, or even a “freebooting” pirate, for that matter. Spotify must have known that it was streaming “unidentified” material as it apparently set aside a “reserve fund” for those “unidentified” streams, but when was that “reserve fund” actually set aside? Only after Victory Records, and others, complained? Do NOIs (“address unknown” or otherwise) apply retroactively; and, more importantly, are the Section 115 compulsory licenses even available with respect to the “unidentified” material?

    In the other hand (I know that’s a lot of hands, but hey, it’s the music business), who is actually responsible for uploading the un-copyrighted performances of an un-copyrighted musical composition to Spotify and willfully making mechanical reproductions (copies) of that material without first obtaining permission? Stated another way, who is actually responsible for uploading the unpublished (unsold) and unregistered (with the US Copyright Office) performances of a musical composition to Spotify and willfully making mechanical reproductions (that is to say, duplicate copies) of that material without first obtaining permission?

    Is it Spotify per se, or is it the PROs, the music publishers, the record labels, the aggregators, or otherwise the composers, lyricists or recording artists (performers) themselves, who upload the “particular performances of a copyrighted musical composition (song)” to Spotify, which, if it be of the latter, I suspect that they would surely know who they are, independent or otherwise, wouldn’t they?


    [III of IV]

  8. Lest it be overlooked...

    Apple, for example, requires that a “particular performance of a musical composition (song)” have an assigned ISRC before being uploaded to iTunes. Furthermore, that a “particular performance of a musical composition (song)” must be uploaded by an Apple-approved aggregator such as CD Baby or TuneCore, in most cases. I say in most cases because in order to qualify as an “Indie Content Provider” to deal directly with iTunes, the “Indie Content Provider” is required to have, among other things, “[a]t least 20 albums in [its] catalog.” Those are just a few of the requirements of iTunes with respect to DIY composers and artists set out in the link below. If the information is out-of-date, please advise, thank you. I know that iTunes has also sold music videos and ringtones for many years, though I do not know what its procedure was in the past, or currently is, for uploading those music videos and ringtones to iTunes, as well as whether or not an ISRC number was required, though I tend to believe, and the information set out above and in the link below regarding ISRCs buttresses my belief that an assigned ISRC was also required for those music videos as well. As I do not have now nor have I ever had an Apple Music subscription (I used to have an iTunes account, but I closed that and stopped using iTunes altogether a number of years ago, in mid-2014, if memory serves, and I do believe it does), I don’t know what Apple requires to qualify as an “Indie Content Provider” to deal directly with Apple Music, or otherwise what its policy is with respect to DIY composers and artists, and whether or not the same requirements apply as set out above concerning iTunes.



    Ironic, to say the least, that Spotify only now includes “songwriter” and “producer” credits as it seems that the whole controversy between Spotify and the NMPA and its member publishers centered on the purported inability of Spotify to obtain such information for purposes of, including, but not limited to, serving the NOIs (“address unknown” or otherwise), accounting and making payments.

    On a side note, I am curious as to whether or not the information Spotify provided to the public throughout the years in support of its aggressive world-wide marketing campaign to acquire subscribers and sell Spotify subscriptions, among other things, or otherwise, has been, and is completely accurate, and whether or not that information also includes the identities of the so-called “co-authors,” but I neither have nor have I ever had a Spotify account so it is difficult to access and thereby personally sift through that information, a situation which is exacerbated in that the “available” music on Spotify “may increase and decrease on a day-to-day basis” (a time consuming process to be sure), but also access to that information can only be had vis-à-vis a paid subscription (if such information is only available behind a paywall at the time of the search, or otherwise). Must I subscribe, pay and agree to the terms of service of each and every streaming service in order to do so? I’m not a Rockefeller⎯sheesh!

    In any event, I have an alternate theory as to why Spotify is only now interested in including such information. Now that Spotify is rushing headlong to “IPO” (actually, a “direct public listing”), the “interested parties” in Spotify want to ensure that the “new proprietors” have that information so that they make payments for each and every stream and mechanical reproduction (that is to say, duplicate copy) made after they “cash out.” If anyone would know exactly how many mechanical copies Spotify has made over the years it would be those “interested parties” (You neither read nor hear about the record labels with an interest in Spotify bitchin’ since the Spotify and Victory Records “scandal,” do you? Hmm⎯now this is only speculation, and as I do not want to be seen as tarnishing the “good name and reputation” of those records labels (and music publishers?) with an equity interest in Spotify, in particular, or otherwise, without good reason, I apologize in advance if I am totally mistaken in this regard, but my guess is that when “the cat was let out of the bag,” vis-à-vis the Spotify and Victory Records “scandal” which is but one of numerous record labels (there are around 40,000 or so, I believe), Spotify found itself in a potentially costly situation (up to $150,000 per willful “spin”) and inferior bargaining position as a result; accordingly, the record label owners, for example, worked out a pretty good deal for themselves in some back room, which, and again, this is only a guess, substantially increased the record label owners equity stake in Spotify⎯what do you think; does any of this make sense?), and they would not want to lose out on such a significant source of income after they “cash out.”



    I can only imagine what the initial increase in operational costs of that streaming platform will be (not even including the recent increase of the CRB) when the “new proprietors” pay royalties for each and every stream and mechanical copy made as Spotify has reportedly lost billions (but the music publishers and record labels reportedly made billions) thus far and did not include the cost (the $43 million settlement has not yet been approved) of all of those unauthorized mechanical reproductions (copies), but I suppose once Spotify reaches scale, those extra expenses will be of little consequence, a trivial matter⎯can you imagine what the “re-licensing” costs might be in a few years. Those “interested parties” reportedly exchanged less than equitable “blanket licensing” rates for equity stakes in Spotify, therefore, take a wild guess, a shot in the dark as to “who” may yet again own Spotify, or at least a part of it, when “re-licensing” time comes around⎯that is, of course, if the major record labels, for example, actually intend to sell their equity stake in Spotify rather than further increase their interests therein (which would reasonably explain the unorthodox “IPO” strategy), but that is another story.

    There are “almost 40,000 indie and major record labels,” and the chart depicted in the link below only shows those with a 5% interest or more, and 35.6% of “Spotify’s biggest controlling shareholders” unidentified—hmm.




    Quick thought: Though I have read in various news reports that contrary to the Apple/Beats Music $3.2 billion acquisition whereby Vivendi subsidiary UMG, for example, realized a $404 million profit that was not shared with its artists, et al., that the major record labels have all reportedly “said they intend to share a Spotify IPO windfall with their artists,” this time around (though as Recode further noted, “[t]echnically, this isn’t an IPO; it’s a direct public listing”). Therefore, out of an abundance of caution, I strongly suggest that the artists and managers, etc., consult their contracts to see whether or not the artists will actually receive any of “those spoils” if the record labels, and the major labels in particular, do not sell their equity stakes in Spotify (it is worthy of note that I cannot find any news reports indicating whether or not the major label’s “sister” music publishers, for example, have made similar promises—perhaps the DMN readership or others know if such promises were made and if so, when, and by whom?) Please note that as I am outside of the music industry looking in (to be sure, if it was not yet obvious, I am no publisher or record label “servant”), that due to the ultra-ubiquitous use of “non-disclosure agreements,” I may therefore be a tad bit uninformed and a bit behind the times so to speak as to information concerning any revenue sharing stemming from the Apple/Beats Music acquisition as sharing of those profits may have since occurred. In spite of that, even if “bound and gagged,” those artists and their managers should know whether or not they have since received a share of that $404 million from UMG, for example); nevertheless, as previously suggested, please double-check, if only out of an abundance of caution.





    Assuming for some yet unknown reasons that the record labels do decide to sell, as those “interested parties” have years of actual operational costs data to draw upon, there will be no excuse whatsoever available to Spotify’s “new proprietors” for not making full and timely payments as all such payments information will only now be readily available (what a coincidence, right?) when the new owners “move-in,” so to speak. History shows that if those payments are not made, Spotify’s “new proprietors” will find themselves in a court of law defending themselves against allegations of willful infringement, and this is just a guess, but the amount demanded in those circumstances will be (assuming civility), and again, this is just a guess⎯$150,000 for each and every willful infringement?


    It must be remembered that in this particular “parade of horribles,” speaking to the “copyrighted” material, it will not be the 3 major music publishing/record label companies (“both” of which are owned by the very same interests, an incestuous relationship at best) standing in a circle saber-rattling amongst themselves (hence the two-inch thick callused hands), it will be those very same interests marshaled against Spotify’s “new proprietors”⎯business as usual for the so-called “copyright” brigade. If history be an accurate guide, should anything happen to those payments, Spotify’s “new proprietors” will undoubtedly find themselves engaged in litigation faster than a rabbit gets [insert imagination here]. Caveat emptor⎯caveat emptor!


    Lest it be forgotten, or otherwise overlooked, “When he has sold his book [musical composition, et cetera], the only property which he reserves to himself, or which the law gives to him, is the exclusive right to multiply the copies of that particular combination of characters which exhibits to the eyes of another the ideas intended to be conveyed,” Stowe v. Thomas, 23 Fed.Cas. 201 (E.D.Penn. 1853).

    Even if the un-copyrighted musical compositions, and un-copyrighted “particular” performances of an un-copyrighted musical composition (song), for example, are not “protected” under the copyright act, rightful protection under The Constitution of the United States of America yet exists, does it not?

    The Constitution of the United States of America is the greatest “statute” of them all, is it not? Or, am I absolutely mistaken in that regard, in that⎯one day it applies and the next day it doesn’t; rather than being authoritative, it is optional⎯kind of like “guidelines?” As previously stated, I am neither a constitutional scholar nor a lawyer; nevertheless, I know an absurdity when I see one and to think or act like it is not authoritative with respect to authors and inventors is one such absurdity (yet absurdities abound). Not to mention the fact, but I do, that it is no less optional than the obligations imposed upon those mentioned in Section 3 of the Fourteenth Amendment who have, for example, “previously taken an oath.” In any event, a quick perusal of Article VI of The Constitution should resolve any lingering doubts that persist, if any, as to its authority.

    With all due respect for states rights, that is to say, those rights that have been retained by the states, respectively, as opposed to those rights which have been surrendered to the federal government upon adoption of The Constitution of the United States of America and its subsequent Amendments. That said, the rights set out in Article I, Section 8, clause 8, are amongst those rights so surrendered, and made applicable to the several states by virtue of the Fourteenth Amendment [1868]⎯do I understand this correctly?

    Lest it be forgotten, Article I, Section 8, clause 8, provides, that:

    “The Congress shall [mandatory, not permissive] have Power … To promote the Progress of Science and useful Arts, by securing for limited Times to Authors and Inventors the exclusive Right to their respective Writings and Discoveries;”

    That said, I cannot help but wonder how KNB ENTERPRISES v. Matthews, 92 Cal. Rptr. 2d 713 (Cal. Ct. App. 2000), citing, inter alia, MITE Corp., 457 U.S. 624, 631 (1982), might be relevant, wherein it was stated, in part:

    “California law concerning right to publicity, as any state statute or law, is subject to pre-emption under the supremacy clause of the United States Constitution if it ‘actually conflicts with a valid federal statute’ or ‘stands as an obstacle to the accomplishment and execution of the full purposes and objectives of Congress.’ (Edgar v. Mite Corp. (1982), 457 U.S. 624, 631 [102 S. Ct. 2629, 73 L. Ed. 2d 269]). In addition, ‘when acting within constitutional limits, Congress is empowered to pre-empt state law by so stating in express terms. [Citation.]’ (California Federal S. & L. Assn. v. Guerra (1987) 479 US 272, 280 [107 S. Ct. 683, 93 L. Ed. 2d 613]) 17 United States Code, section 301, part of the 1976 Copyright Act … expressly prohibits states from legislating in the area of copyright law.

    “‘The general rule of law is that an act done in violation of a statutory prohibition is void and confers no right on the wrongdoer.’ Waskey v. Hammer, 223 U.S. 85, 94, [1912] and cases cited.” Ewert v. Bluejacket, 259 U.S. 129 (1922). The Supreme Court reversed the holding of “barred by laches,” among other things.


    Those who can make you believe absurdities can make you commit atrocities.” ~Voltaire

    [IV of IV] To be continued…