NMPA’s Danielle Aguirre talks packages, free market agreements and AI

In the keynote at our inaugural Music Ally Publishing Summit last week, Danielle Aguirre, EVP and General Counsel of NMPA, was interviewed by Alisa Coleman, COO of ABKCO. The conversation focused primarily on two pressing policy issues.

First, whether the NMPA’s dispute with Spotify over its bundle royalties should be an impetus for legislation allowing publishers to waive statutory licensing in the US. And secondly, how best to regulate AI with regard to music rights.

In May, NMPA wrote to the chairmen of the Senate and House Judiciary Committees, suggesting that Congress allow publishers to withdraw their rights from the current coercive system for streaming and “operate in a free market subject to certain conditions.” fulfill”. .

At the Music Ally Publishing Summit, Aguirre explained the thinking behind this proposal.

“I think it’s really important that if publishers can take advantage of their ability to enter a free market, they benefit from it. And I think the transparency around PROs and CMOs leads to that,” she said.

If you can see where your royalties are being paid, if you can see when things like licenses expire, and if you can exit a collective management society and negotiate your rights on a free market… that, in my opinion, is beneficial for Publishers.”

“I know it’s controversial and I’m not trying to be overly controversial here. It may not be beneficial for CMOs, but it is beneficial for publishers.”

Aguirre spent relatively little time discussing the details of the NMPA’s dispute with Spotify over whether or not its decision to classify its premium subscription as a bundle — because it now includes audiobooks — was correct.

“Of course I don’t think that was the case. But that wouldn’t have happened if we were in a free market. I can promise you that wouldn’t have happened,” she said, before focusing on the possible next step of changing the licensing system.

“I think there are ways to be in a free market and make sure there are protections in place to make sure licensees can’t manipulate – because it’s much easier to manipulate sweeping government regulations that have been in place for years and that you don’t “It’s about manipulating individual market negotiations that have a two-year license.”

Aguirre also pointed out that when rights holders don’t have the ability to negotiate – and then don’t renew their demands every two years – “you lose the ability to fully protect your rights and the value of the rights you have.” have to maximize what you manage.”

She accepted that services that bundle music with other types of content are on the rise and popular with consumers.

“As a consumer, this is clear. “I want all my stuff in one place.” “I want a subscription and I want easy access to everything.” So I get it, but from our point of view: first of all, it comes with a lot of rights, and secondly, it’s a real risk , because we risk losing value when people bundle products,” she said.

“We can protect ourselves from this, particularly when music often determines the value, the package and the product offering, by ensuring that we are in a free market for at least some of these rights so that we can protect the rights.” what we negotiate.”

Aguirre returned to the topic later in the keynote, emphasizing that the NMPA does not believe publishers should strip PROs and CMOs of all their rights and stop using them.

“It is a huge advantage to have collective organizations for some rights. I think there is a question as to whether certain types of rights, such as digital rights, need to be licensed in large collective institutions. I think there are models that have proven that that’s not the case,” she said.

“YouTube, Facebook and others do not benefit from collective licensing in the United States. They license publishers and have found a way to do it. And I don’t think they would say they don’t have full coverage.”

“They negotiated licenses, these licenses have been in effect for YouTube for almost 15 years, and it worked. So I don’t think you have to be in a collective environment to do that,” Aguirre added.

“I certainly don’t think it hurts consumers, and I think it might even help songwriters in some cases – if entering a free market can actually lead to higher royalties and therefore higher revenue streams from royalties.”

Aguirre also called for more transparency about streaming services’ future bundling plans, suggesting that publishers were being disadvantaged in negotiations because they tried to predict DSPs’ strategies.

“We all know that music is often the key to adding value to the rest of the platform, and it would be really helpful to understand how that works and get the full picture,” she said.

“They look at their products, and they look at what product they want to have in two, four, six, 10 years, and they negotiate with this knowledge that we obviously don’t know.” I don’t have it. So we find ourselves in a bit of a vacuum and ask ourselves: How should this be used? What value does that have?”

This, in Aguirre’s view, makes it more difficult for the NMPA and its members to place a value on their rights, especially when collective bargaining occurs every five years, rather than the “free market” agreements that the NMPA would prefer.

“These are not two-year contracts that we can renegotiate if things go in a direction we didn’t expect. As far as our mechanical rights go, there are five-year contracts that can’t really be changed easily,” she said.

“So you’re living in a situation where you’re negotiating something hoping that you understand how it’s used, and you don’t always understand that.”

Of course, this feeling of rights holders grappling with future unknowns surrounding new technologies also applies to artificial intelligence.

Aguirre provided an overview of the current regulatory situation regarding AI and music rights. Although a number of bills were introduced in the US, it provided a factual assessment of the prospects for short-term action.

“Good progress has been made in the EU on certain AI laws. We don’t see that and we won’t see that in the United States,” Aguirre said.

“We don’t have the same fast-paced system. Unfortunately, we don’t have a system that appears to be moving at all!”

Aguirre said the main goal is transparency: about the training data AI companies use to build their models, as well as watermarks to make it clear when music is AI-generated. But she acknowledged challenges.

“The US political system is tough. It’s really not possible to pass a law unless it’s done almost unanimously. “95% of laws in the United States are passed by what we call unanimous consent, which literally means that everyone in Congress, in both chambers, agrees that it can go to trial and be passed essentially unanimously,” she explained.

“As you can imagine, this doesn’t happen very often in our political environment, making it incredibly difficult to pass legislation. That’s why there is no movement on the AI ​​front in the United States.”

“We have little chance of passing meaningful legislation that protects us, gives us transparency and protects us from this [unlicensed] Use of copyrighted content and training data,” Aguirre added.

She would like to see “good actors” in the AI ​​world push for licensing agreements to be signed in the absence of legislation.

“A lot of the contours of AI and what these generative AI companies can do will be decided in court,” Aguirre said.

“There are currently over 20 cases in the U.S. involving the use of copyrighted content in training generative AI platforms, and I think market deals will help make the case.”

“But that is difficult. Most major companies have been sued and are therefore the least likely to want to enter into a market contract in the United States at this time,” she continued.

“They are all waiting to see how the lawsuits turn out and whether the courts will conclude that they were allowed to use the copyrighted musical works and sound recordings without permission or not.”

“We’re in a bit of a bind where it would be wonderful to do market deals with some of these companies. Unfortunately, they are not prepared to do that at the moment.”

Aguirre also had some concerns about the way the music industry in general influences policymakers in the United States.

“Every music group has to have their own lobbyist and their own issues, and they go to Congress to lobby on all these niche issues. And I understand it, but at the same time it just does harm,” she said.

“We need to sit down and become smarter in the way we work together. Songwriter groups, publishing groups: We don’t all agree on every issue, but we agree on most of them, and we agree on a lot of big things.”

“So if we don’t get together and coordinate the policy issues and work together on these big issues, we’re never going to get that consistency around the world. “We’re not even going to get any movement on legislation in the U.S., and that’s a huge problem.”

She gave the example of a group representing songwriters in the US Congress advocating for AI in Congress and is calling for compulsory licensing to ensure that all AI companies are properly licensed to use their music.

“And we ask ourselves: What are you doing? This is a disaster! Look at the compulsory license we have. We have lost control of the rights. We cannot negotiate in a market. It’s a five-year contract,” Aguirre said.

“We have no idea where AI is going. Do you want to sign a five-year contract and don’t know how that will change? But if we all sat down and worked together, we could sit down and say, let’s actually think strategically about how we can best move forward here and do something that could have an impact.”