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The CEO of TikTok faced a grilling Thursday from a U.S. congressional committee in a rare public appearance where made his own case for why the hugely popular video-sharing app shouldn’t be banned.
Shou Zi Chew’s testimony came at a crucial time for the company, which has acquired 150 million American users but is under increasing pressure from U.S. officials. TikTok and its parent company ByteDance have been swept up in a wider geopolitical battle between Beijing and Washington over trade and technology.
“Mr. Chew, you are here because the American people need the truth about the threat TikTok poses to our national and personal security,” Committee Chair Cathy McMorris Rodgers, a Republican, said in her opening statement. “TikTok has repeatedly chosen a path for more control, more surveillance and more manipulation.”
Chew, a 40-year-old Singapore native, told the House Committee on Energy and Commerce that TikTok prioritizes the safety of its young users and denied allegations that the app is a national security risk. He reiterated the company’s plan to protect U.S. user data by storing all such information on servers maintained and owned by the server giant Oracle.
“Let me state this unequivocally: ByteDance is not an agent of China or any other country,” Chew said.
On Wednesday, the company sent dozens of popular TikTokers to Capitol Hill to lobby lawmakers to preserve the platform. It has also been putting up ads all over Washington that tout promises of securing users’ data and privacy and creating a safe platform for its young users.
TikTok has been dogged by claims that its Chinese ownership means user data could end up in the hands of the Chinese government or that it could be used to promote narratives favorable to the country’s Communist leaders.
In a rare, bipartisan effort to reign in the power and influence of a major social media platform, Republican and Democratic lawmakers pressed Chew on a host of topics, ranging from TikTok’s content moderation practices, how the company plans to secure American data from Beijing, and that it admits spying on journalists.
Watch the Hearing Below:
In 2019, the Guardian had reported TikTok was instructing its moderators to censor videos that mention Tiananmen Square and other images unfavorable to the Chinese government. The platform says it has since changed its moderation practices.
ByteDance admitted in December that it fired four employees last summer who accessed data on two journalists, as well as other people connected to them, while attempting to track down the source of a leaked report about the company.
For its part, TikTok has been trying to distance itself from its Chinese origins, saying that 60% percent of its parent company ByteDance is owned by global institutional investors such as Carlyle Group. ByteDance was founded by Chinese entrepreneurs in Beijing in 2012. Responding to a Wall Street Journal report, China said it would oppose any U.S. attempts to force ByteDance to sell the app.
But Chew pushed back against the idea that TikTok’s ownership was an issue in itself.
“Trust is about actions we take. We have to earn that trust with decisions we make for our company and our products and potential security, privacy content, manipulation concerns raised about TikTok are really not unique to us” Chew said. “Ownership is not at the core of addressing these concerns.”
A U.S. ban on an app would be unprecedented and it’s unclear how the government would enforce it.
Experts say officials could try to force Apple and Google to remove TikTok from their app stores, preventing new users from downloading it as well as preventing existing users from updating it, ultimately rendering it useless.
The U.S. could also block access to TikTok’s infrastructure and data, seize its domain names or force internet service providers like Comcast and Verizon to filter TikTok data traffic, said Ahmed Ghappour, a criminal law and computer security expert who teachers at Boston University School of Law.
But a tech savvy user could still get around restrictions by using a virtual private network to make it appear the user is in another country where it’s not blocked, he said.
To avoid a ban, TikTok has been trying to sell officials on a $1.5 billion plan called Project Texas, which routes all U.S. user data to domestic servers owned and maintained by software giant Oracle. Under the project, access to U.S. data is managed by U.S. employees through a separate entity called TikTok U.S. Data Security, which employs 1,500 people, is run independently of ByteDance and would be monitored by outside observers.
As of October, all new U.S. user data was being stored inside the country. The company started deleting all historic U.S. user data from non-Oracle servers this month, in a process expected to be completed later this year, Chew said.
Generally, researchers have said TikTok behaves like other social media companies when it comes to data collection. In an analysis released in 2021, the University of Toronto’s nonprofit Citizen Lab found TikTok and Facebook collect similar amounts of user data valuable for advertisers.
To block such tracking, Congress, the White House, U.S. armed forces and more than half of U.S. states have banned the use of the app from official devices.
But wiping away all the data tracking associated with the platform might prove to be difficult. In a report released this month, the Cybersecurity company Feroot said so-called tracking pixels from ByteDance, which collect user information, were found on 30 U.S state websites, including some where the app has been banned for official use.
Other countries including Denmark, Canada, Great Britain and New Zealand, along with the European Union, have already banned TikTok from devices issued to government employees.
David Kennedy, a former government intelligence officer who runs the cybersecurity company TrustedSec, agrees with restricting TikTok access on government-issued phones because they might contain sensitive information. A nationwide ban, however, might be too extreme, he said. He also wondered where it might lead.
“We have Tesla in China, we have Microsoft in China, we have Apple in China. Are they going to start banning us now?” Kennedy said. “It could escalate very quickly.”
3LAU is close to a settlement to end a lawsuit claiming the DJ refused to properly share the earnings from an $11.7 million NFT auction with a musical collaborator.
Citing the fact that the two sides were “near a settlement in principle,” a New York federal judge on Monday tentatively dismissed the lawsuit filed by musician Luna Aura over the huge proceeds from the much-publicized NFT auction of his album Ultraviolet.
Aura (real name Angela Anne Flores) launched the lawsuit last fall, claiming 3LAU (real name Justin Blau) offered her just $25,000 from, even though she said she was owed a 50 percent recording royalty from one of the songs on the album called “Walk Away.”
“Despite this financial windfall, defendants only offered Luna Aura a flat one-time payment of twenty-five thousand dollars as compensation in connection with the sale of Ultraviolet and ‘Walk Away’ NFTs,” her lawyers wrote at the time. 3LAU strongly denied the allegations, with his manager saying they would “vigorously defend the lawsuit.”
Specific terms of the tentative settlement were not disclosed in public court records, and neither side provided additional details when contacted by Billboard. If the deal is not finalized within 30 days, the judge said the parties could reopen the case and resume litigating.
Even during 2021’s fever-dream craze for NFTs (non-fungible tokens), 3LAU’s Feb. 2021 auction stood out as notable. By selling 33 collectible tokens linked to his 3-year-old album Ultraviolet — the NFTs gave the buyers access to vinyl copies, unreleased music and other special experiences — the DJ-producer raked in $11.7 million. “It was one of those moments in my life where I was like, ‘Holy s—,’” 3LAU told Billboard at the time. “‘I think we just changed everything.’”
But according to Aura’s November lawsuit, he didn’t share those profits with a key person who helped create the album. She says her contract guaranteed her a 50% recording royalty on “Walk Away,” and that she also owned 30% of the underlying musical composition. The lawsuit did not specify exactly how much moneys he believed she was owed from the auction.
In a statement to Billboard after the case was filed, 3LAU’s manager Andrew Goldstone strongly denied the allegations: “These claims are without merit, and we will vigorously defend the lawsuit that was just filed yesterday without any prior notice. There are no set standards for how to approach an NFT project like this, which involved much more than just the music. Justin’s team tried for months to reach a deal with Flores in good faith, but she stopped responding and instead chose to file a lawsuit.”
Goldstone declined to comment on Monday’s order announcing the near-settlement. Aura’s attorney, Moish E. Peltz, did not return a request for comment.
Bettie Levy remembers “all kinds” of music playing in her parents’ Washington, D.C., household while she was growing up. And when she was finally allowed to go to the local shopping mall by herself while in middle school, she kept up the family tradition.
“I would take any dollar I earned anywhere and come home with singles and cassette tapes,” Levy recalls with a laugh. “Ultimately every birthday, I always wanted something relating to music. Then after CDs came, tower racks took over my room. So I think it was pretty much a given that I was going to do something in music.”
And she did. After several career-evolving stints at Sony Music, in 2009, Levy affixed her initials to her own enterprise. Focusing on live events and brand partnerships, New York-based BCL Entertainment encompasses all music genres, as well as A-list talent ranging from artists and Broadway stars to film/TV actors, athletes and influencers. And it’s all in service to a client roster that includes brands, hospitality companies, TV/digital production companies and charitable organizations.
Last year, according to Levy, BCL Entertainment logged the most events in the company’s nearly 14-year history. Its string of multiple talent-production projects commenced in January 2022 with the launch of the ongoing national ad campaign for Folgers coffee, featuring Grammy-winning artist Trombone Shorty. Last fall marked the second season of BCL’s collaboration with sports apparel company Fanatics and its merch line from Grammy-winning country artist Darius Rucker and the NFL. According to Levy, the Darius Rucker X NFL By Fanatics clothing line was among the top five NFL men’s apparel lines during the football season throughout the Fanatics network of websites. In association with Fanatics’ in-house event planners, Levy was also a producer of the company’s 2022 Super Bowl party performances featuring Doja Cat and other artists.
BCL Entertainment kicked off 2023 with Levy again working on Fanatics’ 2023 Super Bowl Party, which showcased performances by J Balvin, Travis Scott, The Chainsmokers and A$AP Ferg, among others. Coming soon is a new national ad campaign for Meow Mix — featuring *NSYNC’s JC Chasez and a feline boy band created by the cat food brand — that will air across broadcast, cable and digital outlets. Meanwhile, Calissa Sounds, a summer concert series staged in the Hamptons that BCL co-created with the Civetta Hospitality Group, will return this year (last year’s event included Fat Joe and Wyclef Jean). BCL is also looking forward to another season of Darius Rucker X NFL By Fanatics in the fall.
Still running is the award-winning ad campaign done on behalf of The J.M. Smucker Co.’s Jif peanut butter brand, for which BCL Entertainment served as talent producer. Featuring rap icon and Atlanta native Ludacris, the 2021 commercial spun off several offshoots including a TikTok campaign that has generated 7 million campaign-related views to date, an original song (“Butter ATL”) released on all DSPs, a limited-edition necklace and a charity partnership with the Boys & Girls Clubs of America. The Jif team went on to win four awards at the 2022 Cannes Lions ceremony for the campaign.
BCL’s steadfast mission, says Levy, is to “authentically match talent with brands and events. Then the rest is simple. The best brand/event and talent relationships are the ones that aren’t forced.”
A case in point is the Folgers commercial with Trombone Shorty. The process began with two key questions: Who could vibe well with the ad’s theme song — a reworking of the Joan Jett & the Blackhearts classic “Bad Reputation” — utilized in an effort to prove the 170-year-old coffee product is still cool to drink? And, in turn, who could also bring a New Orleans flair, given that the brand, also part of the Smucker family, is headquartered in The Big Easy? The ensuing chemistry between Folgers, NOLA native Trombone Shorty and Jett led to BCL pitching, closing and structuring Folgers’ sponsorship of Trombone Shorty’s Voodoo Threauxdown Tour in 2022, as well as the musician’s one-off show in New Orleans last April with special guests that included Jett herself.
“Jif and Folgers are examples of multi-dimensional campaigns in which one thing leads to the next between events and brand partnerships,” says Levy. “When you’re touching all the creative points and everything comes full circle like that, it’s pretty incredible.”
Besides authenticity, agility is another component of BCL Entertainment’s operational philosophy. As it was from the start, Levy continues to utilize a team of four to five key people, allowing her to “flex up or down as needed, bringing in staff and partners for different projects, as well as using local vendors to keep costs at bay.” That agility, Levy adds, came in handy during the pandemic: “When everything pivoted to virtual, we were able to move swiftly and adapt; meeting clients, brands and entertainers where they were in that moment.”
BCL’s ability to move quickly and adapt is tied to one more foundational component: Levy’s long-term industry relationships. While attending Boston University, Levy interned with Sony Music. Literally the day after graduation, she started working full-time in the radio promotion department at Columbia Records in New York. A gig as the label’s video booker followed, as did a more senior booking role at Epic Records. Then in 2007, Levy joined former Sony Music Label Group CEO Don Ienner’s label and production company, IMO Entertainment, as director of business development.
“By being at Sony, I built relationships on steroids,” says Levy. “It was just so exponential between the people and talent that I was meeting and working with. Going from that corporate environment to the entrepreneurial space at IMO, along with having been taught at home that anything is possible … the combination of all those experiences put me in the position to take the risk and start BCL Entertainment. What forever holds true and allows me to continue to succeed — no matter the evolution of the industry — are relationships.”
SPOTLIGHT:
What’s changed most in my line of work is that after having BCL Entertainment for nearly 14 years, I feel surrounded more regularly by female executives. As a matter of fact, there are a few companies we partner with where all the executives are women. That’s awesome to see as well as be part of. Also, the prevalence and importance of events and brand partnerships have grown exponentially over the past 20-plus years. Every event and brand partnership today has — and often needs — talent attached, particularly for press and social media reasons. The latter has become invaluable and is a very different form of promotion than when I started in the business.
What most people don’t understand about what I do is they often think it’s easy because every day looks like so much fun. And it is fun because I love what I do. But there are usually 752 things going on in my mind at once and it’s all hard work. Each and every client is my No. 1 priority — at the same time.
I would tell people coming up in this industry that it’s tough. But keep your head high; operate with transparency and class; and build and nurture relationships, because it’s the business of “know who” more than “know how.” Also always remember, one opportunity leads to the next. Explore every opportunity, as you have no idea where it will take you and who you will meet next.
The best advice I received is from my dad; I quote him all day long. Some of my favorites: “You only need one ‘Yes’; and no means ‘Not now.’” “Don’t give up. Ever.” “If you want to get something done, ask the busiest person you know. Busy people get everything done.”
I’ve learned it’s important to be loyal, be honest and be yourself and you will always win. Also, if you aren’t learning, you aren’t growing.
Spotlight is a Billboard Business series that aims to highlight those in the music business making innovative or creative moves, or who are succeeding in behind-the-scenes or under-the-radar roles. For submissions for the series, please contact spotlight@billboard.com.
To clear up questions about the copyrightability of AI in music, the U.S. Copyright Office (USCO) recently signaled that copyrighting songs is about to get a lot more complicated.
Last week the USCO released guidance on the copyright-ability of works made using AI, saying that a work that is a combination of both AI generation and human creation can be eligible for copyright protection, with any purely AI made portions carved out. Essentially, it takes the position that copyright only extends to the portions of the work that are attributable to human authorship.
This sounds logical however often such clear boundaries do not exist in music. The USCO acknowledges this by leaving space for copyrighting AI-generated content if it gave form to an author’s “original mental conception,” as opposed to being a purely “mechanical reproduction.”
Giving form to an idea is something songwriters are familiar with. Whether for writer’s block, inspiration, or organization, many if not most current creators use some form of AI tools to a certain extent, and how that informs their process often is not clearly defined.
To address this, the policy caveat is that the copyrightability of any given work will depend on its specific circumstances and will need to be determined on a case-by-case basis. It’s worth noting copyright does not protect ideas, only expression, and these distinctions will no doubt be complex when addressed in practice. Specifically, it states,
“This policy does not mean that technological tools cannot be part of the creative process. Authors have long used such tools to create their works or to recast, transform, or adapt their expressive authorship. For example, a visual artist who uses Adobe Photoshop to edit an image remains the author of the modified image, and a musical artist may use effects such as guitar pedals when creating a sound recording. In each case, what matters is the extent to which the human had creative control over the work’s expression and ‘‘actually formed’’ the traditional elements of authorship.”
The USCO has been engaging with the relevant parties on this topic for some time, and there is great pressure to chart the path on AI as platforms become increasing advanced. Across the art world, AI is already pushing boundaries.
This most recent policy guidance also likely was prompted by a pending lawsuit on the question of whether any human authorship is required for copyrightability. The case was brought against the Copyright Office by an AI developer whose registration for a visual work of art was rejected since he listed AI as the author.
The lawsuit argues that the Copyright Act does not require human authorship. While it is true that the Copyright Act does not explicitly include the word human authorship and instead refers to “original works of authorship,” the Copyright Office’s decision not to grant the copyright is bolstered by decades of caselaw that interpret “author” to mean “human.” A few years ago a selfie taken by a monkey was deemed ineligible for copyright protection on the basis that the monkey was not a human author.
The USCO has authority to prescribe application requirements and to “establish regulations not inconsistent with law for the administration of the functions and duties made the responsibility of the Register.” (17 U.S.C. 702). However, the Copyright Office will be subject to the courts ruling on this case.
As far as the current rule limiting copyrightability to human expression goes, the exact amount of human involvement necessary to merit copyright protection in a work created using AI remains to be seen. This untested line raises significant questions for the music industry and the foreseeable future of AI-assisted songwriting.
The primary example we have from the Copyright Office is fairly straightforward, however it is not a song. An author submitted an application for registration of a comic book where the text was written by the human author but the images were generated by AI, through a tool called Midjourney.
The Copyright Office determined that while the work was copyrightable, the copyright only extended to the human-authored text, and to the human authorship involved in the selection and arrangement of the images but did not extend to the AI-generated images themselves.
Clearly a comic book allows for easy differentiation between images and text. That may be analogous to, for example, a melody created purely by AI combined with lyrics created purely by a human or vice versa. In cases like this, foreseeable questions would arise around remixing and sampling—is it fair game to remix and sample portions of a song that were created by AI and excluded from copyright protection?
While it’s easier to discern how the Copyright Office will rule on some hypotheticals, it’s extremely unclear how these lines will be drawn when the human and AI contributions are more intertwined.
AI is often used as a collaborative partner in the creative process. For example, a human songwriter might use an AI tool to generate a midi file containing a few bars of melody, or a text-generator to suggest few stanzas of lyrics, and then substantially edit and revise the AI-generated content and combine it with entirely original lines and melodies from their own imagination.
In that situation, it is unclear how the Copyright Office would begin to distinguish between the human authorship and AI authorship involved. At what point, if any, of editing and changing lyrics generated by AI would they become lyrics generated by a person? What determines significant enough change to be considered original? How will registrars investigate these questions when reviewing a copyright application? The USCO advises,
“applicants have a duty to disclose the inclusion of AI-generated content in a work submitted for registration and to provide a brief explanation of the human author’s contributions to the work. As contemplated by the Copyright Act, such disclosures are ‘‘information regarded by the Register of Copyrights as bearing upon the preparation or identification of the work or the existence, ownership, or duration of the copyright.’”
It’s clear how copyright registration could immediately become more complicated and time consuming with these new considerations. One must question whether the USCO has the manpower and resources to take on what is in some ways an entirely new evaluation process for any registrations involving AI.
And aside from registration, these big questions will shape future licensing practices—is a license for a work that is only partially copyrightable worth the same as a license for a fully copyrighted work? What about a work that doesn’t have enough human contribution and doesn’t receive copyright protection—is it free to use, or stream? How will this affect royalty administration?
Beyond the ability to differentiate what is AI and what is human created, there are even larger questions looming around this space. AI works by continually ingesting, or copying, works across the Internet to “teach” its platform to create. To what extent does ingestion need to be generally licensed?
Whether they like it or not, the work of human creators is essentially “training” the computer programs trying to replace them, or some would argue, assist them. AI will continue to be integrated into the creative process, and in an era where the value of human-created music continues to be challenged, it is crucial that the music industry decides how to approach these issues in a way that ultimately ensures the long-term value and quality of human-made songs. After all, there would be no AI generated music without them.
David Israelite is the President & CEO of the National Music Publishers’ Association (NMPA). NMPA is the trade association representing American music publishers and their songwriting partners.
MELBOURNE, Australia — Mushroom Group, the mighty, Melbourne based-independent music company, sends-out the invitations to its 50th birthday party, an occasion that will include a “once-in-a-lifetime” all-star concert.
A raft of releases, both musical, visual and branded merchandise, will drop in the lead-up to the major live event, set for November.
The action starts from today (March 23) with the release of The Temper Trap’s interpretation of The Church’s Billboard Hot 100 hit “Under The Milky Way,” the first in a collection of starry covers of classic Mushroom songs.
In the weeks ahead Missy Higgins, Bliss n Eso, Paul Kelly and others will share their contributions, which, ultimately, will form a Mushroom 50 compilation album.
Founded in 1972 by a then 21-year-old Michael Gudinski, the Mushroom brand has shaped Australia’s music culture ever since.
Today, the group is a two-dozen-strong collection of affiliates active in every conceivable area of the music and entertainment industries, from touring to booking agencies, publishing, merch and marketing services, venues, exhibition and events production, neighboring rights, branding, labels, talent management and more.
Matt Gudinski is now at the helm of the group, as CEO, following the passing of his father Michael in 2021.
The Mushroom 50 concert, says Matt Gudinski “will feature a huge line-up of sensational artists, celebrating some of Australia’s most iconic songs – this will be a once in a lifetime event.”
He continues, “We’ve teamed up with some of the best artists in the world to deliver these reimagined Mushroom hits. Each artist is bringing their own distinct sound and vision to their cover. I’m sure you’ll love them.”
A snapshot of the Mushroom Group story is told in a 90-second promo, which carries the strapline “50 Years of Making Noise.” Keep an eye out for cameos from the likes of Missy Higgins, Jimmy Barnes and Ed Sheeran, whose most recent tour of Australia, produced by Mushroom Group’s Frontier Touring company, was a record-smasher.
The celebration continues with the release later this year of a feature documentary on Michael Gudinski, a legendary character whose death was mourned by many of the giants he worked with, from Paul McCartney to Bruce Springsteen, Dave Grohl and his bestie, Ed Sheeran. The film project, which traces MG’s remarkable life and career, was green-lit last year and will premiere in cinemas across the country.
Also, a limited-edition range of Mushroom 50 merch is now available on mushroom50.com.
“This news is just the beginning,” reads a statement, “expect more exciting announcements to come in the months ahead.” The line-up, venue and ticket details for the anniversary concert will be revealed in due course.
Lil Yachty, Lindsay Lohan, Ne-Yo, Soulja Boy and Austin Mahone are among a number of celebrities who have been charged by the Securities and Exchange Commission for peddling crypto currencies “without disclosing that they were compensated for doing so and the amount of their compensation,” according to an SEC announcement Wednesday (March 22).
The artists were charged as part of a larger investigation into crypto companies Tron Foundation Limited, Bit Torrent Foundation Limited, Rainberry Inc and their founder Justin Sun for the “unregistered offer and sale of crypto asset securities Tronix (TRX) and BitTorrent (BTT).” The SEC also alleges that Sun “fraudulently manipulat[ed] the secondary market” and “orchestrat[ed] a scheme to pay celebrities to tout TRX and BTT without disclosing their compensation” among other accusations.
The SEC also charged adult film star Kendra Lust and influencer Jake Paul in the case. So far, all of the celebrities tied to Sun and his crypto firms — apart from Mahone and Soulja Boy — have reached settlements with the SEC, paying over $400,000 in “disgorgement, interest and penalties… without admitting or denying the SEC’s findings.”
The SEC’s complaint against Sun and his companies was filed March 22 in the U.S. District Court for the Southern District of New York.
“This case demonstrates again the high risk investors face when crypto asset securities are offered and sold without proper disclosure,” said SEC chair Gary Gensler. “As alleged, Sun and his companies not only targeted U.S. investors in their unregistered offers and sales, generating millions in illegal proceeds at the expense of investors, but they also coordinated wash trading on an unregistered trading platform to create the misleading appearance of active trading in TRX. Sun further induced investors to purchase TRX and BTT by orchestrating a promotional campaign in which he and his celebrity promoters hid the fact that the celebrities were paid for their tweets.”
“While we’re neutral about the technologies at issue, we’re anything but neutral when it comes to investor protection,” said Gurbir S. Grewal, director of the SEC’s division of enforcement. “As alleged in the complaint, Sun and others used an age-old playbook to mislead and harm investors by first offering securities without complying with registration and disclosure requirements and then manipulating the market for those very securities. At the same time, Sun paid celebrities with millions of social media followers to tout the unregistered offerings, while specifically directing that they not disclose their compensation. This is the very conduct that the federal securities laws were designed to protect against regardless of the labels Sun and others used.”
Sens. Richard Blumenthal (D-CT) and Sheldon Whitehouse (D-RI) responded to President Joe Biden’s calls for fairness and transparency in ticketing fees by introducing the Junk Fee Prevention Act on Wednesday (March 22). While the proposed legislation goes beyond live music, it would transform how concert tickets are sold and attempts to reduce fees that inflate tickets’ face values.
“Concealed surprise fees — nickel and diming Americans to distraction — must be stopped,” Blumenthal said in a statement.
“Consumers are charged hidden fees when purchasing everything from flights to concert tickets,” added Whitehouse. “Our Junk Fee Prevention Act would provide consumers with the transparency they deserve when making a purchase.”
Biden urged Congress to pass legislation addressing “junk fees” during his Feb. 7 State of the Union address, pledging to cap fees on concert tickets and make companies disclose all-in prices upfront. “Americans are tired of being played for suckers,” he said. “Pass the Junk Fee Prevention Act so companies stop ripping us off.”
Blumenthal and Whitehouse’s proposed legislation would at least improve transparency. Ticketing companies would be required to “clearly and conspicuously” display the total price of a ticket with all fees included “in each advertisement and when a price is first shown to a consumer.”
While the legislation targets concert ticket fees and some re-sale tactics, it’s more than a reaction to Taylor Swift’s botched Eras Tour presale that prompted a Senate hearing on Ticketmaster’s business practices. The Junk Fee Prevention Act seeks to prevent companies from applying or advertising “any mandatory fees that are excessive or deceptive” for any good or service. It also targets fees for airline tickets and short-term housing such as hotels and vacation rentals, and would require airlines to seat parents next to their young children.
Transparency is a key theme of the Junk Fee Prevention Act. It includes a requirement to disclose the total number of tickets being offered for a concert, theater event, sporting event or other events “at a place of public amusement of any kind.” Both lawmakers and consumers have long complained that many concert tickets are held back for fan clubs, commercial partners like credit card companies and VIP packages.
Many of the changes sought in the Junk Fee Prevention Act are also found in the FAIR Ticketing Reforms, a set of “common sense” measures introduced on March 8 by a group of leading music companies including Live Nation, Universal Music Group and Red Light Management. FAIR Ticketing Reforms also calls for an end to speculative selling on secondary markets and mandatory all-in pricing. Unlike the Junk Fee Prevention Act, FAIR Ticketing Reforms also calls for stricter measures against automated bots and policing and fining resale sites that serve as a safe haven for scalpers.
Any person who violates the Junk Fee Prevention Act would be subject to the penalties of the Federal Trade Commission Act. A state attorney general can also bring a civil action if a violation affects residents of that state. In determining whether a fee is excessive, the bill asks the Federal Trade Commission or court to consider whether the fee is “reasonable and proportional” to the cost of a ticket and the reason for the fee. The FTC or court can also consider “any other factors determined appropriate.”
A mandatory fee is defined as any fee required to purchase a ticket, is not “reasonably avoidable,” is not expected to be included by a “reasonable consumer” or “any other fee or surcharge determined appropriate” by the FTC. Within 180 days of the bill’s enactment, the FTC would commence a rule making proceeding to consider whether and how the Federal Communications Commission should require disclosure of mandatory fees or prohibit companies from charging mandatory fees.
French streaming service Deezer and Universal Music Group announced this month that they are partnering to develop and test new potential payment models that would more fairly reward artists, similar to a partnership UMG launched in January with Tidal.
While the streaming services and labels are still a long way off from implementing new streaming royalty payment models, Deezer’s chief executive Jeronimo Folgueira spoke with Billboard about some of the ideas being explored and the economic imperatives that are driving his company to push for a new way to pay rights holders.
Deezer has long advocated for changing payment systems. How have the company’s views evolved?
We were, I believe, the first to really embrace the concept of user-centric, which means that the artist gets a share of the payments that the user that listens to them pays, instead of a global pool. We could never do it unilaterally [because] we have not been able to get the majority of labels to agree to an initiative so far. To do it right, you really need a consensus from the industry and obviously, there are so many players involved that it’s difficult to get that. I do believe [an artist-centric] system is much better than the current system we have, but no system is absolutely perfect. There were some flaws, and that’s why there was so far resistance from some labels. I believe that there are a lot of elements in the artist-centric initiative that Universal is pursuing that make sense and could make something like [user-centric payment systems] even better.
You often mention the importance of “growing the pie.” What do you mean?
When the discussion is about sharing the same pie there are always winners and losers and it’s very difficult to get consensus. That’s why if you focus on growing the pie then you can have a discussion also about the distribution of that pie because some will win and some will win double. One of the things that I’m really excited about in this discussion is … also figuring out ways of monetizing fandom better. If we can find ways to increase the [average revenue per user] on the way, that would be a win for the artist, for the labels and for the platforms like us.
How does that fit into Deezer’s overall growth strategy?
Basically, today 100% of our revenues come from selling access to the catalog. So you pay $10.99 and you get access to the full catalog. But we don’t let users pay for anything else on the platform. We know that we have a lot of fans of artists on Deezer but we cannot monetize them in any other way. And the artist is struggling to monetize them in other ways because they don’t have direct access to the fans. We believe that working together with the label and the artists to figure out ways of helping the artist directly access their fanbase and monetize that fandom would benefit us and them as well.
What’s in it for you?
If we only change the compensation model there is nothing in it for Deezer except that we will be a platform where artists are remunerated better. It will give us a bit of differentiation but economically it will not really change anything.
If we find ways of monetizing better, let’s say, if we would allow fans to subscribe directly to artists, we would have an additional revenue source that we would share with labels and the artists, which will improve our growth and profitability profile. It is important to be more fair in terms of payout but to have a financial impact, we also care a lot about growing the pie. I fully share [Warner Music Group CEO Robert Kyncl‘s] view. Music is extremely undervalued. We are very keen on working with Universal, but we are also keen on working with all the other labels like Warner, Sony, Believe and all the indies to make the industry better by monetizing better and then sharing that pie in more fair ways.
Do you have to “grow the pie” in order to pay artists more?
There’s not enough money right now for us all. First of all, music is undervalued. We’re giving too much for too little. Second, with the current monetization model, there is really not enough money for everyone. The platforms like Deezer or Spotify, we’re not making enough profits. And many artists are struggling to make a living. So for the system to be viable we need to grow the pie. That has to be the number one focus.
At the risk of asking a naïve question, what if the share of the pie that has historically gone to the labels shrank? Is that just impossible?
So basically the artists get more, and the DSPs get more and the labels get less? The thing is that it is a fragile ecosystem with a lot of negotiation power in the hands of the labels. You [the DSPs] do need a full catalog. The labels are not going to hand their money to us or to the artists. Instead of having that fight — which is what we’ve been doing basically for the last 10 years — it is a far healthier discussion to be had working together to grow the pie especially because music now is extremely undervalued. The piracy days are long gone. This is the right time to have the discussion. One of the things that doesn’t help is that a lot of the distribution is in the hands of companies that don’t have music as a core business.
Who are you referring to?
I’m talking to the tech giants. Three key players here are tech giants, and their core business is not really music. Then you have two independents, one that is very big — Spotify — and then Deezer. We are truly music; it is our duty and necessity to work together with the labels to make the whole ecosystem better and bring the value of the music to where it should be.
Where does the initiative with UMG currently stand?
There is nothing that we are testing yet, and we don’t have a deadline. But we are starting to work on different models of compensation that we could eventually test that would solve a lot of the issues we see today.
During a recent earnings call, Universal Music Group chairman and CEO Lucian Grainge said he wanted a new model where “artists are rewarded for the fans they bring in [to subscribe to streaming services] and the engagement they drive [on those platforms].” How can you determine which artists drive subscriptions?
That is very difficult to know and quantify. This is one of the areas where we are working with Universal to figure out if there is a way to measure, quantify it and use it for payment or not. That’s part of the exercise. That is one of the most tricky ones. There are other areas [such as] if a user goes and searches for an artist and song, that has more value than if they just go and listen to that stream in a lean-back experience. A stream that is heard as part of a playlist is not as valuable as when you go proactively to a platform, look for a song and play that song. You as a fan care about that song more. We agree with that as a concept but the question is how do you apply that in a model that is easy to implement and explain? There needs to be transparency [so] everyone understands how things get calculated and how people get remunerated. It’s easier said than done. This is why we need to work with Universal but also with other labels to do that exercise. First, we have to agree with the principles. And then you have to find a pragmatic way of actually doing it.
Could you walk me through the different models you are exploring?
I cannot go into that level of detail right now because we are in a very exploratory phrase. We are looking at what is feasible, what impact does it have and, based on that, we will have a proposal to test. But it’s too early to explain these models.
Have you seen any examples of streaming services that have done a good job of encouraging active fan experience?
Video and music are very different so you cannot really draw comparisons between the two. I don’t think anybody has cracked it, and that’s why Universal is working with us. We would love to be the first ones to figure out the new model that makes sense. SoundCloud made an announcement with Warner Music around user-centric, but they haven’t disclosed anything. Since they are a private company, we do not know how that has worked or played out.
Where are the majority of Deezer’s users based? Could the results of the Deezer and UMG experiment be applied on a global scale, or would differences in listening behavior in different markets limit the wider applicability of the study?
We are a global company with a presence in 180 countries. We have a large user base in France — less than half of our subscribers — then we have a lot of subscribers … in Brazil and then a bit everywhere else. Our model will have a big impact on the French market because there we are a massive player, but the learnings can be applicable anywhere in the world.
However, Lucian has mentioned that he sees different models for different platforms at different stages of their development in different countries. I think there is some merit in that. Our Brazilian business is very different from our French business and American business. You might need different models as you go through different stages in a market. Right now, it’s one model that came up really quickly, built 15 years ago on the back of piracy, and that model fits all. I think in the future we need more flexibility.
Is there anything I didn’t ask that you wanted to highlight?
Something that is really important is that we are working really closely with UMG because they are the largest label in the world. And they are a very important player and you cannot change the system without having Universal on board. I’m really excited that Lucian is leading this discussion and trying to make the industry better for everyone.
But I want to make sure it is well understood, as well, that this should benefit all real artists, whether they are from Universal, any other label or independent. We want to reward real artists that create real music. This is not to benefit Universal alone in any way. This is not a Universal-centric payments system. We’re working together to make the industry better for everyone who creates high-quality content.
You said a better system will reward “real artists” and “high-quality content.” What is the opposite of that? And should it not be rewarded in this new system?
There is a whole discussion on what are we going to do when machine-generated music comes because it is going to happen. There is not that much yet, but I think it’s a matter of months before we start getting flooded by machine-generated content, and we need to think about how we’re going to handle it. The other thing is it’s not the same that an artist creates new music and creates a fan — is a real artist in a way — compared to, for example, people that do a cover…. Those streams are not as valuable to us as the original song from the original band. The same thing with sounds that get uploaded, for example, the sound of the washing machine for people who need that to sleep. The sound of rain is not as valuable as a proper album created by an artist recorded in a studio. The fact that the recording of rain gets more streams than Lady Gaga, I find that astounding. We have to do something about it. It is hurting the user experience. We cannot flood the catalog with poor-quality stuff.
What should be done, and is this part of artist-centric royalties or another initiative?
We are trying to address that problem as part of the artist-centric discussion. We believe there are things we can do with the artist-centric model that will create the right incentives and will solve part of that problem. Yes, there are other areas where we might be stricter about the rules of what can be uploaded to the platform or not. We will explore all the different options. Obviously taking a big part of the economic incentive [away] is a big part of the job.
Sony Music Entertainment has quietly been battling for more than two years against the creator of a popular TikTok song over allegations that he prominently sampled a 1986 track by Japanese composer Toshifumi Hinata without “paying a cent.”
In a lawsuit first filed in December and refiled this week, Sony claims that Trefuego (real name Dantreal Daevon Clark-Rainbolt) made “flagrant” use of Hinata’s “Reflections” in his own song “90mh” — a track that’s allegedly been featured in 155,000 videos on TikTok and been streamed 100 million times on Spotify since it was released in 2019.
“In copying the ‘Reflections’ musical composition and sound recording, Trefuego brazenly sought to ride the coattails of Hinata’s creativity and popularity without regard to the United States copyright laws or the rights of Plaintiffs,” the label’s attorneys wrote.
Sony says it first took action back in January 2021, notifying Trefuego of the “infringing nature” of his song. After he allegedly refused to remove the song himself, the company filed takedown requests in August 2022 to get it pulled from TikTok, YouTube and Spotify. The company first sued Trefuego in December in Arizona federal court but refiled the case on Monday (March 20) in Texas federal court.
A manager for Trefuego did not immediately return a request for comment on Wednesday.
An instrumental featuring strings and piano, “Reflections” was released on a 1986 album but has made recent appearances in Netflix’s 2020 film Tigertail and in popular ambient music playlists on Spotify. Amid a “surge” in interest in such music on TikTok and other platforms, Sony says it’s been “highly selective” about allowing the song to be used, granting licenses “only for those projects that Hinata himself might endorse.”
But Trefuego “simply stole” the sample, Sony says.
“Trefuego took a very different approach,” the company claims. “He used and copied plaintiffs’ work without so much as asking, or paying a cent to plaintiffs, and he continued to exploit that music despite plaintiffs’ demand that he stop.”
In terms of the specific music borrowed, Sony claims that Trefuego sampled a 15-note melodic strings sequence accompanied by a looping chord progression played on the piano. That clip is looped throughout the entirety of “90mh,” Sony says.
“Trefuego’s infringement is blatant,” the company wrote. “[His] use of ‘Reflections’ permeates the entirety of the infringing works, and for many listeners, is the only reason they listen to them.”
An attorney for Sony did not immediately return a request for additional comment on the dispute with Trefuego.
TikTok is ramping up a public relations campaign to fend off the possibility of a nationwide ban by the Biden administration, and it’s bringing some unconventional advocates to help: online influencers.
Dozens of TikTok creators — some with millions of followers on the video-sharing app — came to Capitol Hill on Wednesday to lobby in favor of the platform, one day before lawmakers are slated to grill the company’s chief executive about concerns over user data falling into the hands of the Chinese government.
Shou Zi Chew plans to tell Congress on Thursday that TikTok, which was founded by Chinese entrepreneurs, is committed to user safety, data protection and security, and keeping the platform free from Chinese government influence. He will also answer questions from U.S. lawmakers worried about the social media platform’s effects on its young user base.
At the heart of TikTok’s trouble is a Chinese national intelligence law that would compel Chinese companies to fork over data to the government for whatever purposes it deems to involve national security. There’s also concern Beijing might try to push pro-China narratives or misinformation through the platform.
At a media event coordinated by TikTok on Wednesday, some content creators acknowledged that concerns about data security are legitimate, but pointed to precautions the company is taking, such as a $1.5 billion plan — dubbed Project Texas — to route all U.S. data to domestic servers owned and maintained by the software giant Oracle.
TikTok has been attempting to sell that proposal to the Biden administration, but skeptics have argued it doesn’t go far enough. The administration is reportedly demanding the company’s Chinese owners sell their stakes or face a nationwide ban.
“I don’t know much about politics, but I know a lot about fashion, and I know a lot about people,” Ok said. “And just to be here and share my story is what TikTok has invited me to do.”
Tensions around TikTok have been building on Capitol Hill, reaching a boiling point late last year when a proposal to ban the app off of government phones passed with bipartisan support and was signed into law by President Joe Biden. House Republicans are pushing a bill that would give Biden the power to ban the app.
Other bills have also been introduced — some bipartisan — including a measure that would circumvent the challenges the administration would face in court if it moved forward with sanctions against the social media company.
The effort to target TikTok is part of a larger, tougher approach that Congress has taken in the past several months as China’s relationship with two U.S. adversaries — Russia and Iran — has come into focus. A recent incident with a spy balloon forced even some wary congressional Democrats to join Republicans in opposition, and there is now a strong bipartisan concern in Washington that Beijing would use legal and regulatory power to seize American user data or use the platform to push favorable narratives or misinformation.
TikTok’s response to the political pressure can be seen all around the nation’s Capitol, with the company putting up ads in area airports and metro stations that include promises of securing users data and privacy and creating a safe platform for its young users. Last year, the company spent more than $5.3 million on dispatching lobbyists to the Hill to make its case, according to Open Secrets, a nonprofit that tracks lobbying spending.
On Thursday, Chew will be sticking to a familiar script as he urges officials against pursuing an all-out ban on TikTok or for the company to be sold off to new owners. TikTok’s efforts to ensure the security of its users’ data go “above and beyond” what any of its rivals are doing, according to Chew’s prepared remarks released ahead of his appearance before the U.S. House Committee on Energy and Commerce.
Chew pushed back against fears that TikTok could become a tool of China’s ruling Communist Party because its parent company, ByteDance, was founded in Beijing and also operates from there.
“Let me state this unequivocally: ByteDance is not an agent of China or any other country,” Chew said.
He distanced TikTok from its Chinese roots and denied the “inaccurate” belief that TikTok’s corporate structure makes it “beholden to the Chinese government.” ByteDance has evolved into a privately held “global enterprise,” Chew said, with 60% owned by big institutional investors, 20% owned by the Chinese entrepreneurs who founded it and the rest by employees.
It’s “emphatically untrue” that TikTok sends data on its American users to Beijing, he said.
“TikTok has never shared, or received a request to share, U.S. user data with the Chinese government,” Chew said. “Nor would TikTok honor such a request if one were ever made.”
Whether those promises will alleviate concern is another matter. TikTok has come under fire in the U.S., Europe and Asia-Pacific, where a growing number of governments have banned the app from devices used for official business. India, Afghanistan and Indonesia have banned it nationwide.
Chew, a 40-year-old Singaporean who was appointed CEO in 2021, said in a TikTok video this week that the congressional hearing comes at a “pivotal moment” for the company, which now has 150 million American users.
Chew said TikTok’s data security project is the right answer, not a ban or a sale of the company.
“No other social media company, or entertainment platform like TikTok, provides this level of access and transparency,” he said.
The company started deleting the historical protected data of U.S. users from non-Oracle servers this month, Chew said. When that process is completed later this year, all U.S. data will be protected by American law and controlled by a U.S.-led security team.
“Under this structure, there is no way for the Chinese government to access it or compel access to it,” he said.
He said a TikTok ban would hurt the U.S. economy and small American businesses that use the app to sell their products, while reducing competition in an “increasingly concentrated market.” He added that a sale “would not impose any new restrictions on data flows or access.”