Major Labels

Record Labels Conspired To Stop Public Domain Beatles Music In Canada

1Owing to Canada's shorter copyright terms, several protected works (including early Beatles recordings) had entered the public domain, triggering mass panic in the recording industry and causing Stephen Harper to surreptitiously extend copyright on sound recordings. One company, Stargrove Entertainment, had already released an album of public domain music, however, and incited major label wrath in the process. 

Guest Post by Mike Masnick on Techdirt
Earlier this year, we discussed that, thanks to shorter copyright terms in Canada, things like early Beatles recordings and James Bond had entered the public domain up north. It was no secret that the recording industry was totally freaked out about this, and that resulted in the somewhat bizarre situation in which Canadian Prime Minister Stephen Harper single-handedly extended copyright on sound recordings for 20 years by sticking it into a budget update, without any public discussion or concern about the fact that he was simply wiping out twenty years of use of works that the public had been promised. 

Of course, this extension only applied to works that hadn't yet fallen into the public domain, so there is still a small window of early 1960s sound recordings that are, in fact, in the public domain. One company, Stargrove Entertainment, sought to take advantage of this, and released a CD of public domain Beatles music, selling it at various retailers like Wal-Mart, and causing it to be the top selling CD in Canada for a little while. And that's when the recording industry struck back. According to a massive legal filing to Canada's Competition Tribunal filed by Stargrove, the big record labels conspired to shut down its ability to sell public domain music (hat tip to Michael Geist for first highlighting this filing). 

There were a number of nasty tricks played by the legacy recording companies here, but it starts with the fact that, while the sound recordings are in the public domain, the compositions remain under copyright. Normally that shouldn't be a problem, as Canada effectively has a compulsory licensing system for mechanical licenses on the publishing. Pay up the standard fee and you're all good. And that's exactly what Stargrove did for that Beatles album. But, it was then that it appears the powers that be in the record labels — who just happen to also own the major publishing companies — suddenly decided that it would no longer approve mechanical licenses.

The publishers associated with each of the Titles include ABKCO, Casablanca and Sony (collectively, the “Title Holders”). One by one, and in quick succession, each of the Title Holders gave instructions to CMRRA [Canadian Musical Reproduction Rights Agency Ltd.] in January or February 2015 to stop issuing mechanical licences to Stargrove. 

A CMRRA representative professed her surprise to Stargrove at this instruction from the Title Holders, but CMRRA followed their instruction. In fact, CMRRA went even further and refused to grant Stargrove any mechanical licences, whether from one of the Title Holders or not. Stargrove’s attempts to enter into an MLA were stymied by CMRRA, who erected barrier after barrier to Stargrove’s application. 

CMRRA refunded Stargrove’s royalty payment for the Titles at the end of February 2015. 

On multiple occasions, Stargrove requested explanations for the refusals to grant mechanical licences, both from CMRRA and from the Title Holders directly, and asked them to reverse course. Stargrove has been refused an explanation, other than in a letter from CMRRA, which stated that the Title Holders’ “refusal to deal is at least partially related to the fact that there are public domain master recordings on the products in question.”

Thus, even though the recordings are in the public domain, suddenly Stargrove is blocked from releasing CDs with those recordings, despite the fact that CMRRA has always approved every other mechanical license request at the standard fee ($0.083 per song, per copy for songs less than 5 minutes). 

And that was just the beginning. Universal Music Canada's then-CEO, Randy Lennox, then sought to interfere with Stargrove's distribution partner, reaching out to them to try to resolve "the public domain issue."

Randy Lennox, the CEO of Universal Music Canada Inc., sent an e-mail to the principals of Anderson, the distributors of Stargrove’s CDs, asking Anderson to partner with Universal to find solutions and resolve what he called a “public domain issue”.

Did you know the public domain is an "issue"? Now you do… 


And that's not all. Stargrove also alleges that Universal Music started posting negative reviews online of the Beatles CD:

Brian Greaves, an account manager at Universal Music Canada Inc., concocted negative reviews on Walmart's website, complaining that Stargrove’s products were of poor quality. He encouraged other Universal employees to do the same and to help him with Universal’s “campaign” to discourage Anderson from distributing Stargrove’s CDs, stating that poor reviews would deter Anderson from distributing Stargrove’s products in the future. Walmart subsequently removed all the fake reviews from its site. Stargrove’s CDs had a low return rate: of the over 2000 Stargrove CDs sold, only one CD was returned. 

Mr. Greaves noted that Stargrove’s CDs were taking away from Universal’s sales and market share, and claimed that Universal had already successfully removed a Rolling Stones title from the CDs offered for sale by Stargrove, despite the fact that the copyright in question was held by ABKCO, not Universal.

All this because the industry so fears having to compete against the public domain. All this because, despite having total exclusivity for fifty years on some of the most popular music on the planet, that's still not enough

It really makes you wonder why does Universal Music and the other record labels seem to hate the public so much? When those songs were recorded, everyone knew they'd be in the public domain now. That was a part of the deal. And it was certainly enough incentive to get the songs recorded at the time. So why are they so focused on continuing to block the public domain today?

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  1. Years ago many, if not all music distributors based in Canada, not just Stargrove, did this. Most of the budget music distributors who sold a ton of CDs, compilations type stuff to mass retailers in the USA were based in Canada mostly due to the shorter public domain terms and the ability to call a CD a “finished product” and therefore an import with rights based on Canada, specific to sound recording terms.
    And let me tell you this, Walmart (or Handleman or Anderson) didn’t care about anything regarding rights, unless it received a cease and desist from a label or publisher, which rarely ever happened. All they cared about was the price and how much they could sell it for and if it didn’t sell, they could ship it all back to you as returns. They certainly didn’t care about the quality of the recordings.
    Secondly, many music distributors in Canada used to “license…’ the sound recordings from Canadian individuals who use to scour basements for original vinyl recordings on old records, and then would lift the songs off the vinyl and re-license them out to distributors to use in CD compilations as long as the vinyl pre-dated the 50 year period. All these vinyls were considered “public domain…” mostly big band, jazz, crooner, 1950s type stuff.
    Thirdly, CMRRA never had any issues handing out licenses mostly because they didn’t know what the end product looked like. And back then the CMRRA was in such a shambles that it was apparent they would send out mechanical licenses (printed on carbon copy papers) to anyone who requested them.
    Fourthly, this “scam” was never looked at in the USA, because the final CDs were classed as imports therefore when mechanical licenses were applied for with US publishers, they simply requested a US import mechanical license. Then companies like Green Umbrella out of the UK started flooding the Canadian and US market with all their cds, containing 30 tracks, because instead of applying for mechanical licenses in Canada and the USA, they simply paid the UK PRO based on wholesale and then shipped it over as an import.
    I could go on but its baffling that one company is being singled out but to be honest if you play with fire (the beatles) you’re bound to on the radar and get burnt…

  2. In fact, you had ASV Living Era become of the first European labels to distribute public domain product worldwide starting in the mid 1980s, JSP, Enlightenment, Acrobat, Proper have very comprehensive roots music (historical country, historical jazz, historical blues, etc.) European public domain boxed sets that often sell for $15-25 or so.

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