The Performance Royalty Debate

I'm going to miss this as we'll be setting up for the Bay Area Takeover day party at SXSW, but if you care about the state of radio royalties, go check out this panel.

south by southwest festivals + conferences: "The Performance Royalty Debate
Room 12AB
Thursday, March 13th
11:45 am - 1:00 pm


The United States is the only territory in which terrestrial radio is exempt from paying performance royalties to performers. A coalition of groups is seeking to reverse this anomaly and bring US policy in line with the rest of the world. This legislation faces strong opposition from the broadcast lobby. What are the issues at stake, and what are the chances that Congress will make it law?"

No one is listening to over the air radio anymore.

Over the air radio continues to bleed listeners. Is is the technology? Is it the programming? Of course, I think it's the latter. Regardless, it's losing audience share. Why? More choices. And as soon as we have internet in cars, AM/FM listening will plummet even more.

Inside Radio 14-Nov-07 reports:

Summer book Persons Using Radio (PUR) numbers declined to their lowest level since Arbitron began keeping statistics in Fall 1998. Radio usage dropped in every cell except 50-54s. Steepest declines continue to be among teenagers and young adults, as their attention is increasingly diverted to other media. That’s especially true among males, with Men 18-24 and 18-34 cells posting the biggest year-over-year declines. But the crowded media world is also taking a toll on the 25-54 money demo, which fell 15.1-14.9. There’s also a disturbing trend among female demos. In the Summer book not a single female cell saw an increase in listening. All but two (50-54 and 65+) declined. Compare that to male demos. While older women mirror the trend of listening less, the Summer book shows Men 45-64 were listening to the radio more.

via Hear 2.0

Notes from the Platform Equality hearing

Rep. Howard Berman, Chairman of the House Judiciary Subcommittee on Courts, the Internet and Intellectual Property, held a hearing on "Platform Equality", which would end the decades long royalty exemption for terrestrial broadcasts.

Howard Coble (R-NC), Steve Cohen, (D-TN), Lamar Smith (R-TX) and Darrell Issa (R-CA) were among those voicing support for the proposal to end the terrestrial broadcast sound recording performance royalty exemption.

The three main arguments for this according to Berman:

The exemption was never justified under copyright law

Calbe, Satellite and Internet have to pay these royalties. There should be no discrimination based on platform.

US us the only major country that doesn't have a sound recording performance right.

Terrestrial broadcasters currently only pay royalties to the composers of the music; the "musical work". They do not pay for the use of the sound recording. In 2005, broadcasters paid $450 million in muscical work performance royalties.

Issa stated that congress is preparing to reorganize section 114 of the copyright act. (This is the sections that covers royalties for internet, satellite and cable services and provides exemptions for some other uses, such as use of music in business environments.)

Issa spoke a lot about HD radio, and the threat it makes to sale of CDs. He is under the impression that the 64kb or lower compressed digital audio sounds as good as CD. HD does not stand for High Definition. It stands for "Hybrid Digital". Unlike HDTV, which improved the signal quality delivered to consumers, HD radio is not a marked improvement. Signal to noise ratios are improved, but there are audible compression artifacts in the audio.

Issa also talked about a flood of HD radio recording devices that automatically split tracks coming out soon. (I think he's extremely wrong on this, there is so little uptake on HD hardware, there are only 2 or 3 HD radios on the market right now, and they're selling very poorly. I've heard a statistic several times that say an American is more likely to be run over by a bus than they are to listen to HD radio in the last year.)

Steve Cohen, who represents Memphis, TN,

San Jose, CA representative Zoe Lofgren was the only rep to speak out on the importance of small, independent internet (and non-internet) braodcasters. While she's not necessarily opposing the rate, she wants a rate that won't hurt small and non-commercial broadcasters.

(more later)

Performance Right and Platform Parity webcast

Tuesday, 31-Jul-07, Elise and I will be attending the hearing of the Subcommittee on Courts, the Internet, and Intellectual Property Hearing on Ensuring Artists Fair Compensation: Updating the Performance Right and Platform Parity for the 21st Century hearings will be webcast live(RealVideo)

I'll post an archive link as soon as I get it.

SoundExchange starts new lobbying organization

SoundExchange starts new lobbying organization: the Music First Coalition to go after over-the-air broadcasters and remove the exemptions they were granted in the copyright act.

Mark Kadesh is the executive director of the Music First Coalition, a new lobbying coalition started by SoundExchange to go after over-the-air broadcasters for more music royalties.

Mark Kadesh, previously the Chief of Staff for Senator Dianne Feinstein, recently joined Bartlett Bendall, and they've changed their name to Bartlett, Bendall & Kadesh.

You can see why Senator Feinstein hasn't been too receptive to internet radio issues; her former chief of staff seems to have been in bed with the RIAA lobby.

And SoundExchange is one of Bartlett, Bendall & Kadesh's clients, as is the RIAA, MPAA and NBC Universal as well as Universal Music Group.

Their current and past clients include:

ALDRICH CONTEMPORARY ART MUSEUM
AMGEN, INC
APPLIED DNA SCIENCES
BICKEL & BREWER
BLACK WARRIOR - CAHABA RIVERS LAND TRUST
BOND MARKET ASSN
CALIFORNIA HEALTHCARE INSTITUTE
CITY OF CALERA, ALABAMA
COALITION FOR FAIR & AFFORDABLE LENDING
COUNTRYWIDE FINANCIAL
EASTERN HEALTH SYSTEM INC
EQUIFAX
FEDERAL HOME LOAN BANK OF ATLANTA
FEDERAL HOME LOAN MORTGAGE CORP
FINANCIAL SERVICES INSTITUTE
FIRST DATA
GENENTECH, INC
HUMAN RIGHTS CAMPAIGN
INTEL
LINCOLN CENTER FOR PERFORMING ARTS
LOVE TERMINAL PARTNERS
MAINE MEDICAL CENTER
METLIFE
METROPOLITAN WATER DISTRICT OF SOUTHERN CALIFORNIA
MORGAN STANLEY
MOTION PICTURE ASSN OF AMERICA
NATL CENTER FOR VICTIMS OF CRIME
NBC UNIVERSAL
OPTIMAL GROUP INC
PMI GROUP INC
RESOURCES LEGACY FUND FOUNDATION
SOUNDEXCHANGE
SOUTH COAST AIR QUALITY MANAGEMENT DISTRICT
SOUTHEASTERN ECONOMIC ALLIANCE
SOUTHERN CALIFORNIA EDISON
UNIVERSAL MUSIC GROUP
WASHINGTON MUTUAL BANK
WESTERN UNION

(Source: US Senate Registrant/Client List and Senate Identification Numbers)

They also list their current clients on their web site, which includes the RIAA.

There is some lively discussion about this over at the Slyck Forums.

NAB supports Internet Radio Equality Act

From the trade journal FMBQ: "The radio board of the National Association of Broadcasters recognizes that the new streaming rates established by the Copyright Royalty Board (CRB) will cause significant harm to broadcasters that stream over the Internet," the NAB said in a statement. "The radio board supports a comprehensive approach to addressing the CRB rate determination, including legislation that vacates the CRB decision and establishes an interim royalty rate structure."