With bars and nightclubs shutdown through the country, restless DJs have taken the party to social media. These livestreams have been a welcome respite for viewers sheltering at home and for the DJs themselves. In addition to breaking up the monotony of life during quarantine, they allow DJs to show off their creativity and musical knowledge, as well as market themselves to an audience that may not normally have an opportunity to hear/see them perform in person. Facebook and Instagram (owned by Facebook) are the two most popular platforms for these DJ livestreams, as they offer the widest reach to potential viewers. However, both platforms actively take down livestreams for copyright violations, drawing criticism from DJs nationwide.
Music Licensing and the Business of Streaming
Copyright laws exist, in part, to protect the right of musicians to derive revenue from the public performance of their music. Of course, musicians are not the only beneficiaries, this right also extends to publishers, record companies, and other entities. As streaming services have grown in popularity, so has the revenue that they’ve generated. In the United States, the total revenue from streaming music in 2019 was $8.8 billion, accounting for 79.5% of all recorded music revenue.
Undoubtedly, record companies want to protect their income. Traditional (or "terrestrial") radio stations, bars/nightclubs, and performance venues are all legally required to obtain performance licenses. All public venues are closed and radio stations are struggling to remain relevant, especially now during the pandemic as most people are staying at home. Therefore, listeners are now tuning into livestreams to consume music. These livestreams generally lack the necessary licenses and thus the record companies are missing out on revenue that they would have otherwise received.
While DJs will argue that record companies need them to break records, this is less true now than it was before. As evidenced by the barrage of music requests during the course of a typical DJ set, party-goers prefer to listen to songs that they already know than to be exposed to new music. Moreover, considering that DJs are reluctant to work for free under the guise that they will receive “exposure,” it is a bit hypocritical to deny compensation to the musician who created a song that a DJ plays during their set.
Nevertheless, there is a middle ground. A few years ago, DJs were in a similar position—streaming music platforms such as Soundcloud would routinely take down recorded mixes due to copyright infringement. Mixcloud, a competitor company, led the way in legalizing DJ mixes, by obtaining statutory licenses pursuant to Sections 112 and 114 of the U.S. Copyright Act. Statutory licenses allow performances through a digital audio transmission, such as internet radio. They are administered by a third party (SoundExchange) and do not entail negotiating a license agreement; instead the broadcaster pays a fee and agrees to comply with several conditions. These include a requirement that the web performance includes information about the song (copyright owner, title, artist, etc) and prohibits interactive performances; in other words, songs cannot be played on demand. Accordingly, mixes on Mixcloud display information about individual tracks in the mix and listeners cannot rewind mixes.
In the last three years, both Mixcloud and Soundcloud have gone a step further and signed direct licensing agreements with record companies, forging the path toward their own subscription services and freeing them from the limitations of statutory licenses.
As DJs have become growingly frustrated with Facebook and Instagram, Mixcloud seized the opportunity and launched its own video streaming platform- Mixcloud Live. The service is available pursuant to its licensing agreements with the various record companies, and therefore is only available to paid subscribers.
Facebook should consider taking a page out of Mixcloud’s book. There is a surging demand for legal livestream services and Facebook is in an excellent position to act now, while it still controls the market share of DJ livestreams. Considering that an essential element of a livestream is the ability for the DJ to interact with the on-line audience, obtaining a statutory license does not seem plausible. Facebook should rather secure direct licensing agreements with the record companies. This would have the added benefit of helping the musicians themselves. Under current U.S. copyright law, when a song is played on traditional radio, the song writers, composers, and publishers receive royalties, but the person who performs the song does not. On the other hand, when a song is performed through the internet, the performer also receives royalties. Therefore, licensing agreements allowing for DJ livestreams would also financially benefit the performer.
What’s a DJ to Do
As things currently stand, the only way for DJ to legally livestream their DJ set, without fear that it will be taken down, is to either obtain direct permission from the copyright owner or to use the Mixcloud Live platform.
This article is provided for general informational purposes only and should not be construed as legal advice. This article is not intended as legal or business advice, shall not be construed as creating an attorney-client relationship, and an attorney or other professional specializing in the field should be consulted.