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"SESAC" putting the kibosh on the Music Modernization Act
Old 31st July 2018
  #1
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"SESAC" putting the kibosh on the Music Modernization Act

Discuss.
Old 31st July 2018
  #2
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Blackstone Group owns SESAC AND The Harry Fox Agency.

Hmmm...
Old 31st July 2018
  #3
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How about this: you don't become a billionaire and manage half a trillion dollars worth of assets by being stupid.
Old 31st July 2018
  #4
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How about this: you become a billionaire and manage half a trillion dollars worth of assets while reserving some consideration for your fellow human beings.
Old 31st July 2018
  #5
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It's all about business for them. They don't want anyone competing with HFA, because let's face it, it would not be hard for a new entity to do a better job at mech's than HFA.... and HFA would have to now be transparent

Makes you wonder... do they have so little faith in HFA's ability to compete? Or are they hiding something they don't want to get sued for? Or are they just sad they're gonna lose their $20mil? Or are they like a horrid landlord who just sits and collects HUD checks without ever fixing broken appliances?
Old 31st July 2018
  #6
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Quote:
Originally Posted by VitaEtMusica View Post
It's all about business for them. They don't want anyone competing with HFA, because let's face it, it would not be hard for a new entity to do a better job at mech's than HFA.... and HFA would have to now be transparent

Makes you wonder... do they have so little faith in HFA's ability to compete? Or are they hiding something they don't want to get sued for? Or are they just sad they're gonna lose their $20mil? Or are they like a horrid landlord who just sits and collects HUD checks without ever fixing broken appliances?

This is so strange. Why risk SESAC's reputation for a paltry $20 million investment in Harry Fox??

$20 million is chump change to these big money private equity knuckleheads.
Old 31st July 2018
  #7
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Quote:
Originally Posted by JohnFulford View Post
This is so strange. Why risk SESAC's reputation for a paltry $20 million investment in Harry Fox??

$20 million is chump change to these big money private equity knuckleheads.
Because even though it's declining, HFA's revenue is still somewhere in the $150mil a year range. Basically uncontested.
Old 31st July 2018
  #8
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Quote:
Originally Posted by VitaEtMusica View Post
Because even though it's declining, HFA's revenue is still somewhere in the $150mil a year range. Basically uncontested.
Hmm..

$150mm top-line with a purchase price of only $20mm...

Is there any other explanation that doesn't involve a blackbox?
Old 31st July 2018
  #9
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Quote:
Originally Posted by JohnFulford View Post
Hmm..

$150mm top-line with a purchase price of only $20mm...

Is there any other explanation that doesn't involve a blackbox?
Not that they're the same, but look at Amazon. Unreal amounts of revenue.... but no profit for many years. Didn't hurt their valuation. I don't know the end game. Maybe they wanted to take SESAC/HFA public?
Old 31st July 2018
  #10
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It occurs to me that perhaps having a company with that amount of revenue that only has to pay out a couple times a year might be a good thing for a private equity firm to have in the portfolio. Especially if they're really confident in whatever short term investments they may have, like if they're doing hard money lending or something.
Old 31st July 2018
  #11
Quote:
Originally Posted by JohnFulford View Post
Discuss.
That is a little misleading though... They don't oppose the MMA, they oppose a government agency to doing the collections.

Quote:
Though SESAC and Blackstone have repeatedly voiced support of MMA via statements, they have expressed opposition to the bill’s plan to set up a government-created collective that would issue a blanket mechanical license and would administer collections from the digital service providers. Instead, SESAC and Blackstone want HFA and other current administrators to continue day-to-day administration and pay out royalties, while leaving the Collective with building and managing a comprehensive song and recording database and handling blackbox resolutions and payouts.
Let me ask everyone this. How many people here trust the government with money? how many people want are streaming royalties to turn into a bureaucratic nightmare like so many other government agencies are (IRS, DMV, Social Security, etc).

I think everyone needs to just stop and take a look for a second at what's actually been said and then look at who is trying to make a big deal about this.

They aren't trying to put the Kibosh on MMA... they are merely saying when it comes to collection... they don't want a government agency doing it an dHFA has already been doing it and so it should continue to do so.

It is obvious they are saying this to protect their own interests and their own business. Anyone in their position would say the same thing. But what they are saying has some validity to all of us... anyone who's had to deal with the DMV or the IRS or Medicare or any other "government" run agency usually all have the same opinion... and that is that it sucks. And now you want them to collect and distribute your streaming mechanical royalties for you? Just imagine what nightmares lay ahead with that scenario!

Honestly I would have been shocked if Blackstone didn't say something. I'm shocked nobody else has said anything!!!

Is HFA that great? Probably not and maybe another collections agency could do a better job... or maybe they couldn't? Who knows. But if history is any guide, our own federal government is sure to make collections and payouts a NIGHTMARE and will at some point switch to using our royalties as a slush fund (as they have done with social security) that they use for other things.

Anyway, a couple of pissed off ASCAP and BMI people are trying to use Blackstone's statement to slander SESAC... hmmmm... coincidence? does anybody other than me remember just a couple years ago the HUGE exodus of ASCAP and BMI publishers and writers over to SESAC??? Yet they are calling on all SESAC composers to leave now and come back to ASCAP/BMI?!?! How convenient! LOL This is all just political BS and an attempt at retribution against SESAC for stealing a huge portion of their repertoire.

If someone is friends with Ross Golan (who seems to have started all this), please ask him what his opinion of the DMV, Medicare, The Federal Reserve and Social Security are. I'm guessing he will not look favorably upon them... and they you can ask him "then why is that what you want for your internet streaming royalties!?!?"
Old 31st July 2018
  #12
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Quote:
Originally Posted by Etch-A-Sketch View Post
That is a little misleading though... They don't oppose the MMA, they oppose a government agency to doing the collections.



Let me ask everyone this. How many people here trust the government with money? how many people want are streaming royalties to turn into a bureaucratic nightmare like so many other government agencies are (IRS, DMV, Social Security, etc).

I think everyone needs to just stop and take a look for a second at what's actually been said and then look at who is trying to make a big deal about this.

They aren't trying to put the Kibosh on MMA... they are merely saying when it comes to collection... they don't want a government agency doing it an dHFA has already been doing it and so it should continue to do so.

It is obvious they are saying this to protect their own interests and their own business. Anyone in their position would say the same thing. But what they are saying has some validity to all of us... anyone who's had to deal with the DMV or the IRS or Medicare or any other "government" run agency usually all have the same opinion... and that is that it sucks. And now you want them to collect and distribute your streaming mechanical royalties for you? Just imagine what nightmares lay ahead with that scenario!

Honestly I would have been shocked if Blackstone didn't say something. I'm shocked nobody else has said anything!!!

Is HFA that great? Probably not and maybe another collections agency could do a better job... or maybe they couldn't? Who knows. But if history is any guide, our own federal government is sure to make collections and payouts a NIGHTMARE and will at some point switch to using our royalties as a slush fund (as they have done with social security) that they use for other things.

Anyway, a couple of pissed off ASCAP and BMI people are trying to use Blackstone's statement to slander SESAC... hmmmm... coincidence? does anybody other than me remember just a couple years ago the HUGE exodus of ASCAP and BMI publishers and writers over to SESAC??? Yet they are calling on all SESAC composers to leave now and come back to ASCAP/BMI?!?! How convenient! LOL This is all just political BS and an attempt at retribution against SESAC for stealing a huge portion of their repertoire.

If someone is friends with Ross Golan (who seems to have started all this), please ask him what his opinion of the DMV, Medicare, The Federal Reserve and Social Security are. I'm guessing he will not look favorably upon them... and they you can ask him "then why is that what you want for your internet streaming royalties!?!?"
From what I understand it isn't necessarily the government, but rather open to 3rd parties to bid for the job (like many gov tasks.) There are plenty of government contractors that do excellent work and are very efficient. The biggest difference being representation on the board by songwriters and publishers. If things aren't going well, they will have a lot more power and a voice to do something about it.
Old 31st July 2018
  #13
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The whole thing is strange to me...why is SESAC posting these points instead of HFA??

It seems like SESAC got thrown under the bus when really it's Harry Fox that's causing the issue (whether they're right or wrong)..
Old 31st July 2018
  #14
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Quote:
Originally Posted by JohnFulford View Post
The whole thing is strange to me...why is SESAC posting these points instead of HFA??

It seems like SESAC got thrown under the bus when really it's Harry Fox that's causing the issue (whether they're right or wrong)..
I'm thinking because HFA doesn't really have a seat at the table... except via sister SESAC.
Old 2nd August 2018
  #15
Quote:
Originally Posted by JohnFulford View Post
The whole thing is strange to me...why is SESAC posting these points instead of HFA??

It seems like SESAC got thrown under the bus when really it's Harry Fox that's causing the issue (whether they're right or wrong)..
SESAC hasn't said anything other than praise and support for MMA!!! It's Ross Golan that is trying to to pull SESAC into this when, like you said it's really a HFA issue. The owner of SESAC and HFA, Blackstone, did say they wanted to change/revise MMA so that HFA does the collection and distribution... but whatever, that's to be expected since that is what HFA's business is.
Old 2nd August 2018
  #16
Quote:
Originally Posted by VitaEtMusica View Post
From what I understand it isn't necessarily the government, but rather open to 3rd parties to bid for the job (like many gov tasks.) There are plenty of government contractors that do excellent work and are very efficient. The biggest difference being representation on the board by songwriters and publishers. If things aren't going well, they will have a lot more power and a voice to do something about it.
I was under the impression it was congress who appointed a collective who then did the collection and distribution... but maybe I read it wrong.

If it is open to a 3rd party big from government contractors that is even worse. then it's whoever pays the politicians the most money through "lobbying" gets the contract regardless of how well equipped they are to do the job.
Old 2nd August 2018
  #17
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Quote:
Originally Posted by Etch-A-Sketch View Post
I was under the impression it was congress who appointed a collective who then did the collection and distribution... but maybe I read it wrong.

If it is open to a 3rd party big from government contractors that is even worse. then it's whoever pays the politicians the most money through "lobbying" gets the contract regardless of how well equipped they are to do the job.
I don't know if it's the gov that chooses or the board of publishers and writers.

C'mon, man! You gotta have faith that some young entrepreneurial spirited person will look at the problem in a different way and come up with a genius system! Like, remember when the government paid $300 million to an outside company for a healthcare website and how awesome that turned out?

Honestly, though, if I were a higher up at HFA and didn't have a non-compete (which is funny because no one was ever competing with them), now is the perfect time to launch something new. I'm sure they've kicked around all sorts of ideas about how they could make the process of collection and distribution better. Also, HFA never had the added benefit of a unified registration system, which could revolutionize the whole process.

If someone came in with a superior idea, and had the team to really do it right, why not give them a shot instead of going with someone who's been doing a mediocre job and apparently feels they're rightful heir to the throne.

Just thinking out loud, but it seems the PRO's themselves are best equipped to take up the process. But then you'd just have another black hole of secretive money distribution. So, never mind.
Old 2nd August 2018
  #18
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I had a long talk with an exec at Sesac this week. I was told that, as it stands, the MMA would contract mechanicals out to a single vendor and that Soundexchange was poised to get the contract. This would put Harry Fox and a handful of competitors out of business immediately, and would offer us no choice in who administers our mechanicals.

According to what I was told, Sesac/Harry Fox aren't petitioning for the contract, they're petitioning to keep some semblance of free market competition in regard to mechanical admin and they're proposing government oversight of the process. They insist that we won't be impacted negatively...in fact, they suggest that this would be positive for everyone (except, presumably, Soundexchange.)

I don't know enough to be certain of any of it, but I do think Sesac/Harry Fox is getting a ton of undue flak for trying (understandably) to keep Harry Fox from being shut down by the government.

Last edited by ehrenebbage; 2nd August 2018 at 03:44 AM..
Old 2nd August 2018
  #19
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Quote:
Originally Posted by ehrenebbage View Post
I had a long talk with an exec at Sesac this week. I was told that, as it stands, the MMA would contract mechanicals out to a single vendor and that Soundexchange was poised to get the contract. This would put Harry Fox and a handful of competitors out of business immediately, and would offer us no choice in who administers our mechanicals.

According to what I was told, Sesac/Harry Fox aren't petitioning for the contract, they're petitioning to keep some semblance of free market competition in regard to mechanical admin and they're proposing government oversight of the process. They insist that we won't be impacted negatively...in fact, they suggest that this would be positive for everyone (except, presumably, Soundexchange.)

I don't know enough to be certain of any of it, but I do think Sesac/Harry Fox is getting a ton of undue flak for trying (understandably) to keep Harry Fox from being shut down by the government.
But I don't think HFA is in any position to now be a champion of free markets. They've bullied their way through the better part of 100 years as a monopoly. Would HFA really allow any kind of oversight? Their practice seems to have long been internal audit->extort a label->hold money for ransom while figuring out discrepancy->rinse&repeat. I think I'd rather have a single transparent entity than one or several companies that can't be trusted to do the right thing. I think SoundExchange is a great candidate for the job. Much more forward thinking and a non-profit.... but, yeah, still with transparent auditing and oversight.
Old 2nd August 2018
  #20
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Whatever their past transgressions, I think it's their position now. I suspect they would allow oversight if their existence depends on it. They are over a barrel and are making an effort to stay alive, it seems.

This editorial makes an interesting case for Sesac’s position. Among other things, it points out that the NMPA owned Harry Fox when it laid the groundwork for Spotify/streaming licensing...we know how well that turned out. Then they sold Harry Fox to Sesac and are now pushing hard to effectively put Harry Fox under, just a few years later.

It sure looks like the leadership responsible for Harry Fox's bully approach is now trying to put Harry Fox out of business.

The Music Modernization Act Is In Serious Trouble — And I'm Not Surprised
Old 2nd August 2018
  #21
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Quote:
Originally Posted by ehrenebbage View Post
Whatever their past transgressions, I think it's their position now. I suspect they would allow oversight if their existence depends on it. They are over a barrel and are making an effort to stay alive, it seems.

This editorial makes an interesting case for Sesac’s position. Among other things, it points out that the NMPA owned Harry Fox when it laid the groundwork for Spotify/streaming licensing...we know how well that turned out. Then they sold Harry Fox to Sesac and are now pushing hard to effectively put Harry Fox under, just a few years later.

It sure looks like the leadership responsible for Harry Fox's bully approach is now trying to put Harry Fox out of business.

The Music Modernization Act Is In Serious Trouble — And I'm Not Surprised
Lots of good points. Hard to draw conclusions, though, as there are many dots and few connects. I guess in the end, those with the most money and power win.
Old 2nd August 2018
  #22
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Quote:
Originally Posted by VitaEtMusica View Post
I guess in the end, those with the most money and power win.
As always. And in the end, those people are very rarely the composers who the reform is for - those who stand to be "protected" and to benefit. Organizations, government and corporations first, creatives second.

Do we really expect it to be significantly different than the past?

I want to see those who administrate my money (BMI, etc.), I want to see their salaries go down 98% like my income streams go down when shows I've worked on for close to a decade transition over from network / cable into streaming. How long would this BS go on if they didn't collect their salaries off the top, and have all their parties and exhibitions before dishing out the remains to their constituents.
Old 2nd August 2018
  #23
Amazing discussion. John, I was hoping for more on your recent podcast but it did raise my awareness. After going down the rabbit hole and trying to figure out what it all means, I couldn’t wait to get Etch’s take.

Great work everyone and thanks to everyone on this forum for your continued opinions. It’s invaluable!
Old 2nd August 2018
  #24
Quote:
Originally Posted by VitaEtMusica View Post
remember when the government paid $300 million to an outside company for a healthcare website and how awesome that turned out?

Quote:
Originally Posted by ehrenebbage View Post
the NMPA owned Harry Fox when it laid the groundwork for Spotify/streaming licensing...we know how well that turned out. Then they sold Harry Fox to Sesac and are now pushing hard to effectively put Harry Fox under, just a few years later.

It sure looks like the leadership responsible for Harry Fox's bully approach is now trying to put Harry Fox out of business.
This is exactly why Blackstone and SESAC are speaking up. If we leave it solely up to the government we will have an affordable care act mess. If we just trust that our politicians will select "good" publishers to oversee this we will end up with an affordable care act mess (remember the government selected people from the health insurance industry to oversee everything).

When we see something messed up, we need to speak up. And this is one of them.

Limiting mechanical collections to one company and only one, who is selected by politicians or selected by a committee appointed by politicians is just a recipe for disaster.

If they set up and over see the process and allow multiple collection agencies, then WE have a choice and competition will drive innovation. Just like SESAC kicking butt lately and the mass exodus from ASCAP and to a lesser extent BMI over to SESAC.

To be honest it's hard to say what HFA is going to be like now that they have new ownership. If they are anything like SESAC I think they will be good for film/TV composers.

Anyway... only time will tell. But I think it's good that Blackstone said something and like I said before, I would have been surprised if they didn't.
Old 3rd August 2018
  #25
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Quote:
Originally Posted by Etch-A-Sketch View Post
This is exactly why Blackstone and SESAC are speaking up.

As of yesterday, it looks like SESAC and Blackstone are pulling the plug on the amendment. Your attorney Dina looks to be involved as well.....

Should be fairly smooth sailing from here out...

Music Modernization Act: SESAC and Songwriters Compromise – Variety


Overall, no matter what back room deals the players may have come up with, I see it as positive. In our political climate, it seems "compromise" is an antiquated word. Glad to see all could get on board for the common good. Maybe there is hope?
Old 9th September 2019
  #26
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Quote:
Originally Posted by Etch-A-Sketch View Post
SESAC hasn't said anything other than praise and support for MMA!!! It's Ross Golan that is trying to to pull SESAC into this when, like you said it's really a HFA issue. The owner of SESAC and HFA, Blackstone, did say they wanted to change/revise MMA so that HFA does the collection and distribution... but whatever, that's to be expected since that is what HFA's business is.
Hello,

I am Evita with 120 cover songs and 9 originals , subscribed to HFA , after a few days ago they informed me they would close my account because I am " just " a cover song singer ) oops whta about my originals ? ) - and yes, this happened, although - to my e-mail adress - NOI licenses are coming in day after day.........and I cannot log in.
I feel like I am ripped of again , my songs got license, and I will not have a cent from them .......somebody please, can you say some encouragement ?
I wrote several messages and they left me without answer ........
Old 9th September 2019
  #27
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Some encouragement.
Old 9th September 2019
  #28
Quote:
Originally Posted by Jeff Hayat View Post
Some encouragement.
Old 9th September 2019
  #29
Quote:
Originally Posted by Evita View Post
Hello,

I am Evita with 120 cover songs and 9 originals , subscribed to HFA , after a few days ago they informed me they would close my account because I am " just " a cover song singer ) oops whta about my originals ? ) - and yes, this happened, although - to my e-mail adress - NOI licenses are coming in day after day.........and I cannot log in.
I feel like I am ripped of again , my songs got license, and I will not have a cent from them .......somebody please, can you say some encouragement ?
I wrote several messages and they left me without answer ........
Hi Evita...

From what you described I think you might be looking at the purpose of the Harry Fox Agency incorrectly.

I noticed you are from outside the US. The way this whole thing functions outside the US can be very different from the way it functions inside the US... so that might be where the discrepancy in understanding is.

the Harry Fox Agency only has a legal right to represent songs for PHYSICAL sale. They collect a mechanical (not synchronization) license from the record label that made the physical product.

Since you do not have a record deal with a label, it doesn't make sense for you to have an account with HFA for your original works... otherwise you would have to pay HFA $0.095 per song per physical album you sold as your record label, only to have them pay you that mechanical royalty money back as you are your own publisher.

When doing cover songs, you need to pay HFA the $0.095/song per album mechanical royalty for each copy of each cover song you sell, so they can forward that money over to each song's original publisher. When doing cover songs, you are acting as the record label and the original publisher of each cover is the publisher.

But for your own material you are the publisher and the record label... so it doesn't make sense to register with HFA until you get a record deal for your original music.

Second... you said you are getting licensing of your original music... by licensing are you referring to synchronization licensing for TV shows, commercials, films, etc? If yes, then to collect those royalties you need to sign up with a Performing Rights Organization (PRO for short) like ASCAP, BMI, SESAC or whatever PRO is in your country of origin.

PROs like ASCAP and BMI collect "performance license royalties" which are separate and completely different than "mechanical license royalties". Performance royalties are money paid by the BROADCASTER (whatever network or venue is publicly playing your song) for each airing of a piece of music whereas Mechanical royalties are paid by the RECORD LABEL for each copy of an album or single sold (or more recently, streamed).

Unfortunately here in the US, the US government decided back in the 30s and 40's that there will be no mechanical license royalty for public broadcasts. In other countries like France, Germany, UK, etc there is also a mechanical license royalty paid for a public broadcast in addition to a performance royalty. And usually in those countries, their PRO collects both and pays both to the composer and publisher... but it doesn't work that way here in the US.

Here in the US it is expected that the upfront synchronization license you charge to a client to use your music in visual media (i.e., video) that will be broadcast publicly, already includes additional money added into it to cover the mechanical license.

This is one of the plethora of reasons why synchronization licenses tend to be much higher in the US than in other countries.

Anyway, I hope this clears things up for you. If you have any questions, please feel free to reply and ask!

Cheers,
Old 9th September 2019
  #30
Quote:
Originally Posted by Evita View Post
Hello,

I am Evita with 120 cover songs and 9 originals , subscribed to HFA , after a few days ago they informed me they would close my account because I am " just " a cover song singer ) oops whta about my originals ? ) - and yes, this happened, although - to my e-mail adress - NOI licenses are coming in day after day.........and I cannot log in.
I feel like I am ripped of again , my songs got license, and I will not have a cent from them .......somebody please, can you say some encouragement ?
I wrote several messages and they left me without answer ........
Also, I looked it up for you. the PRO in Hungary is ARTISJUS. Here is there website...

https://www.artisjus.hu/english/

From glancing at there website it seems like they cover both Mechanical Licensing like HFA as well as public performance licenses like ASCAP/BMI here in the US.

If most of your licensing uses are in the US, then you might be better off signing up with BMI or ASCAP instead of going with ARTISJUS. Or you can sign up for ARTISJUS for any uses of your music in Hungary (or the entire world excluding the US), and then sign up with BMI or ASCAP to cover your uses in the US only (or you can have BMI/ASCAP cover the world excluding Hungary).

Personally, if I were you... I would probably sign up with ARTISJUS to represent you worldwide excluding the US. And sign up with BMI or ASCAP in the US only. That way, when other PROs like SACEM and GEMA collect Performance Royalties and Mechanical Royalties, you'll get them.
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