Exploration Weekly - US Copyright Office Launches Review of The MLC and DLC’s Designations / AI Piracy Not Part of the USTR’s Latest Notorious Markets Report / YouTube Ad Revenue Hits $9.2B in Q4 2023

Every new artist knows how challenging it is to book and manage their own live performances while simultaneously creating and performing their music. Some artists prefer to manage all aspects of their career independently, but more often than not the pressure of being entirely in charge of their career is too much for an artist to handle on their own. Performing artists often will recruit individuals to help them handle the obligations and duties involved in booking live shows and planning tours. These individuals are referred to as an artist’s team. An artist can have managers and agents of many different types, but one of the most important is a booking agent.

We wrote our guide for anyone who wants to understand more about touring and the importance of a booking agent within an artist's career. This guide also explains the roles of a booking agent, how to find one, and how much a booking agent costs.

Check out some of our other guides on music industry topics at Exploration Learn , or subscribe to our YouTube channel for more information.

In this newsletter:

• US Copyright Office Launches Review of The MLC and DLC’s Designations
• AI Piracy Not Part of the USTR’s Latest Notorious Markets Report—Yet
• YouTube Ad Revenue Earns 15% Year-Over-Year Bump, Hits $9.2 Billion in Q4 2023
• Internet Archive Fires Back Against Major Label Infringement Suit, Alleging ‘A Substantial Swath’ of Time-Barred Claims
• UK Government Publishes New UK Streaming Transparency Code

The US Copyright Office has initiated a five-year review of the Mechanical Licensing Collective (MLC) and the Digital Licensee Coordinator (DLC), established by the Music Modernization Act (MMA) of 2018.

The United States Trade Representative released its annual Notorious Markets Report, highlighting illicit digital and physical markets where copyright piracy occurs. While the RIAA recommended including a section on AI Piracy in 2023—it’s not included in the report yet.

Alphabet's Q4 2023 earnings report showed mixed results, with YouTube's ad revenue standing out positively at $9.2 billion, a 15% YoY increase. This contrasts with Q4 2022 when YouTube missed expectations.

Now, the details...

Exploration Weekly - February 2, 2024
Compiled by Ana Berberana

US Copyright Office Launches Review of The MLC and DLC’s Designations

The US Copyright Office has initiated the first five-year review of two music licensing entities established by the Music Modernization Act of 2018: The Mechanical Licensing Collective (MLC) and the Digital Licensee Coordinator (DLC). The MMA was signed into law by then-President Donald Trump in October 2018. The law reformed mechanical licensing through the creation of MLC, a nonprofit organization that facilitates royalty payments to songwriters and publishers for the use of their works by digital music services in the US. The DLC, meanwhile, represents digital service providers (DSPs) in matters related to the administration of the MMA’s blanket compulsory license, which allows eligible services to use copyrighted music for a set fee. Both entities were initially designated by the Copyright Office in 2019. Under the MMA, a periodic review is required every five years, starting this year. The law requires the Register of Copyrights to conduct a periodic review of The MLC and DLC, and publish a notice of the review in the Federal Register. It will subsequently be published every five years in January. The MLC and DLC are permitted to submit statements supporting their ongoing designation by April 1. Members of the public can file comments on these submissions until May 29, with an opportunity to respond to initial public comments until June 28. The MLC and DLC can reply to comments by July 28. The Register holds the authority to conduct additional proceedings as deemed appropriate. While it can either continue the designation of The MLC or DLC or make new designations, it is restricted from altering MMA provisions, governance structures, or blanket license royalty rates and terms. Following the conclusion of the proceedings, the Register will publish a decision in the Federal Register along with the rationale behind it.

AI Piracy Not Part of the USTR’s Latest Notorious Markets Report—Yet

Each year the United States Trade Representative (USTR) highlights both digital and physical markets around the world where copyright piracy threatens the American music community and other creative sectors. In October 2023, the Recording Industry Association of America (RIAA) submitted a statement to the USTR asking the government to include the category of AI voice cloning in this annual list. In this request, the RIAA specifically calls out the service Voicify.AI—which provides voice models of famous music artists. According to the RIAA statement, AI piracy consists of ripping YouTube videos to create acapella tracks of works, then using that track to train an AI voice model. “This unauthorized activity infringes copyright as well as infringing the sound recording artist’s right to publicity,” the RIAA told the USTR in its recommendation to add AI Voice Cloning to the notorious markets report. “The year 2023 saw an eruption of unauthorized AI vocal clone services that infringe not only the rights of the artists whose voices are being cloned but also the rights of those that own the sound recordings in each underlying musical track,” the RIAA continued in its letter from October. Despite that recommendation from the RIAA, the latest 2024 Notorious Markets report still focuses mostly on torrenting sites, storage locker sites, and physical markets located around the globe peddling bootleg copies of recordings and unauthorized merch. The RIAA thanked the USTR for the report, but also highlighted the need for the AI Piracy category to be added in the future.

YouTube Ad Revenue Earns 15% Year-Over-Year Bump, Hits $9.2 Billion in Q4 2023

The Alphabet earnings report for the fourth quarter of 2023 was a mixed bag, but the holding company’s video-oriented subsidiary delivered positive results. YouTube ad revenue reached $9.2 billion in Q4, up from $7.96 billion a year ago. YouTube ad revenue rose 15% year over year and was up a similar amount quarter-over-quarter. In its Q3 2023 earnings report, Alphabet put YouTube’s ad revenue at approximately $7.95 billion. The latest figure puts YouTube in a very different place from where it was a year ago. In Q4 2022, the video giant’s ad earnings missed Wall Street expectations. In contrast, YouTube met analyst projections during the most recent quarter. Alphabet’s topline revenue of $86.31 billion exceeded projections by about $1 billion, but some divisions of Google‘s business are lagging behind the pack. Its flagship search engine posted quarterly revenue of $48 billion, which fell just short of expectations. On the day Alphabet released its Q4 2023 earnings, its stock price fell by approximately 5%. Google underwent a significant round of layoffs during Q4 2023, and that decision is affecting the company’s bottom line as well. The earnings report revealed that Google has allocated $700 million for severance in the current quarter. “We are being disciplined in how we run the company,” Google CEO Sundar Pichai told investors. “Teams are working to focus on key priorities and execute fast, removing layers and simplifying their organizational structures.” YouTube has been affected by layoffs, too, but Google brass expressed optimism about the platform’s future. Advances in AI — which have informed many of the features that have rolled out during the Neal Mohan era — are bringing gains to YouTube’s bottom line. Pichi told investors that his company is “already benefiting from our AI investments and innovation."

Internet Archive Fires Back Against Major Label Infringement Suit, Alleging ‘A Substantial Swath’ of Time-Barred Claims

Last August, the major labels submitted a $400 million lawsuit, centering on alleged copyright infringement committed through the “Great 78 Project,” against the Internet Archive. Now, the self-described non-profit research library has fired back against the complaint. Spanning north of 50 pages, the rightsholder plaintiffs’ initial action (filed in New York but transferred to a California federal court in December) named as defendants the Internet Archive itself, chief executive Brewster Kahle, Kahle’s foundation, audio engineer George Blood, and Blood’s company. Meanwhile, the Archive’s Great 78 Project, as its name suggests, is designed to facilitate “the preservation, research and discovery of 78rpm records,” according to the appropriate website. At present, over 400,000 recordings are said to be available to stream and, if one’s so inclined, download via the Great 78 Project. While the sizable library seems to feature a number of obscure works, it also contains protected tracks performed by the likes of Frank Sinatra, Bing Crosby, and Ella Fitzgerald, the majors maintain. And per these companies, the defendants are facilitating the “wholesale theft of generations of music under the guise of ‘preservation and research’” via the Great 78 Project, complete with activities that “far exceed those limited purposes.” Predictably, the Internet Archive and the other defendants don’t feel the same way, describing the suit as an effort “to condemn a technological initiative to preserve a fast-disappearing part of this country’s cultural heritage,” or “the sounds of 78 rpm records,” individual copies of which “tend to disintegrate over time.” Interestingly, the defendants’ newly filed motion to dismiss only scratches the surface of an argument that the Great 78 Project’s activities constitute fair use – “patrons’ streaming of archival versions of 78 rpm records is generally for education and for cultural and historical research… Such use is quintessentially ‘fair’ and non-infringing.”

UK Government Publishes New UK Streaming Transparency Code

The UK government has published a new transparency code that sees streaming services and music companies commit to provide more information to artists and songwriters about how their music is being monetised on digital platforms. The code, says the Intellectual Property Office, "sets out agreed standards of good practice, forming part of a shared ambition across the music industry to build greater trust in music-maker contracts, streaming licensing deals, royalty payments, usage data, audit rights and communication to music creators. [It] has been developed and agreed by twelve music industry bodies representing music creators, record labels, publishers, digital service providers, distributors and collecting societies". The Council Of Music Makers, which was involved in negotiating the code, has now called on everyone in the music industry to fully embrace it and "to go above and beyond in providing music-makers with the information they need to properly manage, understand and audit the digital side of their individual music-maker businesses". The lack of transparency in the digital music business was raised as a key concern during the UK Parliament's inquiry into the economics of music streaming. In their report, MPs on the Culture, Media & Sport Select Committee stated, "artists and their representatives face a systemic lack of transparency from both music companies and the streaming services that license their works. This exacerbates the inequities of creator remuneration by creating information asymmetries and preventing them from undertaking their right to audit". The fact that artists, songwriters and their managers lack key information about how digital royalties are calculated and paid had been raised many times before. Streaming is a much more complex business than selling CDs, and the streaming licensing model was developed by a small group of streaming services, record companies, music publishers and collecting societies. The deals agreed in the late 2000s were shrouded in secrecy and little information was shared with the music-making community.

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