You have to pay them to play their stuff?

SomaFM listener Robert hits the radio royalty thing on the head:

Beginning with iTunes and through that my intro to your excellent station, I was not listening to music at all. For me was impossible to listen too on a lot of levels. So you introduced me to electronica, remix jazz and the like. Well now I am looking at my purchased iTunes library with  1700 + songs. I was thinking; "You have to pay them to play their stuff?", they should be paying you for bringing them customers like me , where else am I or anybody else going to hear this. Personally I like listening to music again, Thank You!

Most of the indie artists we play feel this way, and many of the independent labels feel this way too. For the most part, it's the big labels with lots of back-catalog that don't see the value in radio play.

If the royalties we pay were much lower (in line with what is proposed for terrestrial radio), this wouldn't be a big issue. But considering that SoundExchange is now pushing for higher and higher rates, there isn't much hope of our getting a royalty rate on par with what the terrestrial guys will likely get.

Looks like our ultimate solution will be directly licensing tracks from artists and indie labels, and play less and less music from the big labels. (We already play less than 20% of our music from big labels, so that won't be too hard.)

Rusty speaking at SXSW on DMCA issues

I'm speaking at SXSWi on "Rewriting the DMCA: How to Improve Section 114":

``This panel will discuss the ugly bits of the Section 114 compulsory license for digital/internet music usage, and what parts are in it for historic reasons that don't apply in todays world; as well as changes that both users of the licenses (webcasters) and content providers (artists, labels) would agree to.``

Tuesday, March 17th; 11:30 am - 12:30 pm Room Hilton E

Conyers, Issa Re-introduce Bipartisan Performance Rights Legislation

This bill as it stands probably doesn't do much for webcasters, other than propose to take away the exemption for terrestrial broadcasters. I'm disappointed that it doesn't say that all forms of broadcasting will pay the same price, be it terrestrial or digital. Media Week has more on the story, including the response from the NAB, including this quote from NAB's letter to House Speaker Nancy Pelosi:

Three of the four largest record label conglomerates -- Universal Music Group, Sony Music Entertainment and EMI -- are internationally-based" and "although the big record labels have seen their revenues decline over the last decade, local radio broadcasters are not the reason the recording industry is losing money, and it should not be the industry to fix it.

 

Here's the text of the press release:  

WASHINGTON. D.C. – Today, House Judiciary Committee Chairman John Conyers, Jr. (D-MI), and Darrell Issa (R-CA), introduced The Performance Rights Act, a bipartisan measure that takes a first step at ensuring that all radio platforms are treated in a similar manner and that those who perform music are paid for their work.   

The legislation would amend an inequity in America's copyright law that exempts over-the-air broadcasters from paying those who perform the music that we listen to on AM and FM radio.  Webcasters, satellite radio providers and cable companies are presently required to pay for music they broadcast.   

"Beyond the fairness that this bill provides for performers, we have an opportunity to show the rest of the world that the United States practices what it preaches in protecting intellectual property," said Issa. "For the past 70 years Congress has ignored the constitutional mandate that we protect copyrights by completely exempting broadcasters from paying performers, while the vast majority of countries have no such exemption.  Our ignorance of intellectual property rights on this issue is a worldwide embarrassment and it must end now."   

"All those in the creative chain of musical production - the artists, musicians, and others who enrich us culturally - deserve to be justly compensated for their work," said Conyers.  "We have introduced the Performance Rights Act to ensure fairness so that any service that plays music pays those who create and own the recordings - just as satellite, cable and internet radio stations currently do. Working with the Senate, I hope that Congress may act quickly to pass this important legislation to level the playing field between different technologies and ensure rightful compensation to performers."  

  The Performance Rights Act is cosponsored by Reps. Issa, Berman, Waxman, Blackburn, Hodes, Wasserman Schultz, Weiner, Cohen, Nadler, Wexler, Peterson (MN), Johnson (GA), Schiff, Sherman, Shadegg, Jackson Lee, L. Sanchez, and Harman. Companion legislation was introduced Wednesday in the Senate by Judiciary Committee Chairman Patrick Leahy (D-Vt.) and former Chairman Senator Orrin Hatch (R-Utah).   

"In introducing the Performance Rights Act, we are sensitive to the needs of broadcast radio stations," said Senator Patrick Leahy (D-Vt.), Chairman of the Senate Judiciary Committee.  "I want to ensure that the performing artist, the one whose sound recordings drive the success of broadcast radio, is compensated fairly.  Our legislation, appropriately, permits noncommercial stations to take advantage of the statutory copyright license subject only to a nominal annual payment to the artists.  Similarly, we intend to nurture, not threaten, small commercial broadcasters.  Smaller music stations are working hard to serve their local communities while finding the right formula to increase their audience size.  I will continue to work with the broadcasters – large and small, commercial and noncommercial – to strike the right balance."    

"This legislation would ensure that musical performers and songwriters receive fair compensation from all companies across the broadcast spectrum - not just from Web casters, satellite radio providers and cable companies," said Senator Orrin Hatch (R-Utah), former Chairman of the Senate Judiciary Committee.  "It is an attempt to strike a harmonious balance between fair compensation for artists and a vibrant radio industry in the U.S."   

 

SoundExchange, Public Radio make deal

FMQB is reporting that SoundExchange and Public Radio has made a deal on royalties:

The agreement will cover approximately 450 public radio webcasters, including CPB supported stations, NPR, NPR members, National Federation of Community Broadcasters members, American Public Media, Public Radio Exchange and Public Radio International.

They go on to say:

Under the new deal, SoundExchange is to receive a single up-front royalty payment of $1.85 million together with consolidated usage and playlist reporting from CPB on behalf of the entire public radio system.

David Oxenford in his Broadcast Law Blog has this additional info:

In some reports, the deal is described as being based on 'consumption' of music, and implies that, if music use by covered stations increases, then the royalties will increase.  It is not clear if this increase means that there will be an adjustment to the one time payment made by CPB, or if the increase will simply lead to adjustments in future royalty periods.

Read "SoundExchange and CPB Reach a Settlement on Webcasting Royalties - More Deals to Come?" by David Oxenford

Zoe Lofgren supporting the Webcaster Settlement Act of 2008

Zoe Lofgren (D - CA) on the Webcaster Settlement Act of 2008. It passed in the house, but still needs to pass in the Senate, and the NAB is opposing it.

Don't forget: we still need to get it passed in the Senate!

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?"

Gonzales proposes new crime: 'Attempted' copyright infringement

`` General Alberto R. Gonzales today highlighted the Justice Department’s ongoing efforts to protect intellectual property rights, and announced a comprehensive legislative proposal entitled the “Intellectual Property Protection Act of 2007,” before members of the U.S. Chamber of Commerce Coalition Against Counterfeiting and Piracy.``

The Intellectual Property Protection Act of 2007 would:

Increase the maximum penalty for counterfeiting offenses from 10 years to 20 years imprisonment where the defendant knowingly or recklessly causes or attempts to cause serious bodily injury, and increase the maximum penalty to life imprisonment where the defendant knowingly or recklessly causes or attempts to cause death;

• Provide stronger penalties for repeat-offenders of the copyright laws;
• Implement broad forfeiture reforms to ensure the ability to forfeit property derived from or used in the commission of criminal intellectual property offenses;
• Strengthen restitution provisions for certain intellectual property crimes (e.g., criminal copyright and DMCA offenses);
• Ensure that the exportation and transhipment of copyright-infringing goods is a crime, just as the exportation of counterfeit goods is now criminal.

David Byrne on Net Radio

David Byrne and Danielle Spencer wrote a good article on the importance of internet radio.

I do want to clarify something that Danielle Spencer wrote:

While traditional terrestrial radio does pay songwriter/publishing royalties for the musical work itself, in the U.S. they don’t pay performance royalties for the sound recording under the rationale that airplay promotes the songs, which benefits the copyright holders. (This determination was mostly due to the radio industry lobbying congress not to collect these royalties.)

This is not historically accurate - this is the version of history that the RIAA likes to propagate! When the original copyright laws were written, Congress realized it was granting a legal monopoly to the copyright holder. So in order to balance out that government-given monopoly it also added provisions for fair use and public rights, such as copying for personal use, exemptions for libraries, and exemptions for radio broadcasters. Fair Use is These public rights are an important part of the American way. We are one of the few countries in the world that have it fair use and other public rights defined in our law. Like freedom of the speech, it is a foundation of our culture. But the RIAA wants to change this, and they're doing it by chipping away at the law.

Can you imaging the outrage if over-the-air radio suddenly was forced to pay huge amounts of money to play music? Music radio would go away, and become all talk radio. Payola would return in a new form: the only music you would hear on the radio is music that the record labels granted permission for broadcasters to play. The labels would then control the music that got played over the air to the public - which is something they have always wanted to do anyway.

Many people, including myself, think that this is all about control and not money. The labels want to control what music the public hear- they want radio to only be an extension of their marketing efforts. So if they can't bribe stations to play the music they want them to play, they went for legislation that says stations have to pay for everything other than the music the labels want them to play.