Wednesday, August 01, 2007

Congress: All Radio Will Pay Perfomance Royalty

Snippets from my cell phone-composed piece (oh, the photo above of the Capitol was taken with my phone, too!) in The Tripwire:
Along with Rusty Hodge and Elise Nordling of SomaFM and Corey Denis of Reapandsow, I traveled to Washington DC this week to talk with members of Congress about saving independent internet radio from copyright royalty rate ruin.

Congress does not want to be involved in this battle. They want to see a settlement reached between SoundExchange and webcasters.

Meanwhile, we attended a House subcommittee hearing [Tuesday] on the new battle to extend the artist performance royalty to terrestrial radio, which has been exempted from this fee since the 1920's. This is potentially devastating news for over-the-air radio. SoundExchange (which is front for the widely-reviled RIAA, whom is a front for the mainly foreign-owned and also widely-reviled conglomerations that own the major record labels) showed up en masse under the guise of The musicFIRST Coalition, the group responsible for this push to get over-the-air radio stations to pay labels for the right to promote their artists for them.

The opening statements from the committee members made it clear that...[t]errestrial radio will soon be paying a performance royalty every time a song airs. Committee chairman Howard Berman (D-CA) indicated that he would be leading the charge for the royalty. Berman chairs the House Intellectual Property subcommittee and opened the proceedings with, "I've wanted to hold this hearing for a very long time, not only because of my constituents but because as a policy matter it is time for Congress to re-evaluate the limitations of the current performance right for sound recordings."

Witness Sam "Soul Man" Moore brought up the topic of older artists who are struggling to make ends meet in their old age. Mr. Moore and others suggested that the radio stations who promoted these artist's records are to blame, and not perhaps the record labels who paid them pennies on the dollar (if that) for their hit records.
Congress might want to consider Joyce Moore's (wife and manager of Sam) words from just three years ago: "Sam was told his pension would be $63.67 a month," says Joyce Moore, his wife and manager. "It should have been $8,000. It's wrong, and it all ties back to royalties. From 1965 to 1992, Atlantic contributed not one penny to Sam's pension. The whole problem is accounting and accountability. We know the labels don't know how to count except
when it comes to their own money."
Referencing the same misplaced blame, Paul Hodes of New Hampshire told of his experience meeting an African American artist who'd had a successful radio hit but who had been paid for his troubles only "$50 and a bottle of Scotch." To Mr. Hodes blame for the result of this exploitation by a record label and poor judgment (and/or desperation) of the recording artist was the fault of radio. Huh? What?

One of the few reasonable opinions given to dispel that myth came from Florida Republican Ric Keller who did his homework by calling a Program Director of a station in his district in Orlando. The PD told him that labels call him daily begging him to play their songs. Another came from San Jose representative Zoe Lofgren who set herself apart from the rest of the committee by not repeating a single RIAA talking point.

In the sky is not falling department, Mr. Berman included caveats regarding imposing this fee: "One is that by extending this right it does not diminish the rights and revenues of the creators of musical works and second, that terrestrial broadcasters, large and small, remain a viable source of music." The latter caveat might suggest that Mr. Berman disapproves of the crippling Copyright Royalty Board rate hike imposed on internet radio.

The only radio representative amongst the five witnesses was Radio Board Second Vice Chair Chester Warfield Jr. of ICBC Broadcast Holdings. Warfield held his own throughout sticking to the National Association of Broadcasters message that the system ain't broke, why fix it.
Read the piece in it's entirety on The Tripwire (free registration required), or go to Intellectual Property Watch or FMBQ for more.


Joyce Moore said...

This is Joyce Moore, Sam's wife and since you've been good enough to offer me an opportunity to say some words on this they are
Sam recently recorded a Brenda Russell/Barry Mann/Cyhtina Weil song with Sting titled "None Of Us Are Free"...
But at yesterday's hearing if you bought Charles Warfield Jr.the President of a powerful mega multi-million dollar broadcast enterprise you'd believe that's all artists should ever be..."free"...but his "free" means no cost to him, as opposed to financially liberated..."It is shameful that the broadcasters of the United States had been able to get away with the "status quo" (wasn't that what for a few centuries to prevent the civil rights legistation from passing in many of our lifetimes?) and get away with being the only holders of terrestrial radio wave rights in the developed countries of the world that don't pay artists when their performances are enjoyed on the airwaves.
And yes, for perhaps the 1st time ever the labels and the artists are in a "KumbyeYa" moment because wrong is wrong and the broadcasters have been strong and wrong for 80 more of what will keep owners of multi-billion dollar radio groups that use AND I DO MEAN USE the recording artists to draw their listeners so they can do the only thing they care about...sell that air time to sponsors for huge profits.
If the artists and the music don't enable them to draw their demos and arbs and they feel it's fair to continue to get away with "exploitation" such as this, then let them all stop playing music and see what kind of revenues they get.
Folks, wrong is wrong and if it occasionally makes for strange bedfellows then it just does... but be assured, the artists are not stupid or crazy and the bill will have to carry safeguards that insure the labels won't be able to touch, cross collateralize, use as if they'd somehow they'd paid it, substitute for or count it as royalties, collect it or otherwise touch one penny of the artist's share...they as copyright holders should get theirs, they're entitled but the artists as the creators ofthe embodied performances that are being enjoyed likewise MUST finally get!...It's a new century and our beloved artists, such as my husband and all of his peers or their survivors deserve to get paid in the greatest country of all, our USA and enabled to then collect the thousands of dollars from around the world that he's locked away from along with all of his peers because principal broadcasters of The United States of American won't do right by it's culture and legacy.
Instead of saying "peace" I pray for
Joyce Moore

PS The tag line to that amazing song title and lyric about is...."IF ONE OF US ARE CHAINED

misty L said...

Hmmm...interesting that just 3 years ago, Sam and Joyce sued the record labels for screwing him out of his pension. But somehow it's now radio's fault?

Read the story here:

Ted said...

Hello Mrs. Moore-

Thanks for taking the time to read my post and comment on the subject. An open and honest discussion will be helpful in resolving this dispute.

I wish you and Sam both nothing but success with the new album "Overnight Sensational." I hope that Music Directors at radio stations across the country like it and give it airplay, which will help to promote album sales.

If you were at the hearing you probably heard Representative Darrell Issa ask Judy Collins if she would rather have her songs played on the radio royalty-free, or not played at all. Sadly Ms. Collins did not answer the simple (a) or (b) question.

If presented with those same two options: (a) have Sam's songs played on the radio royalty-free, or (b) have Sam's songs not played on the radio, which would you choose?

Four years ago you and Sam were suing record labels because "Sam was told his pension would be $63.67 a month. It should have been $8,000. It's wrong, and it all ties back to royalties. From 1965 to 1992, Atlantic contributed not one penny to Sam's pension. The whole problem is accounting and accountability. We know the labels don't know how to count except when it comes to their own money."

Why is it that suddenly radio is the bad guy and you and your husband are testifying in support of the record labels who were so recently the enemy?

I'd hoped to get to ask a couple of questions at the hearing myself. I'd have asked Marybeth Peters of the Copyright Register, who doubts whether radio play promotes artists, why she thinks record labels send me promotional copies of dozens of records a week. (On top of that labels pay radio promotion companies to urge me to play those songs). I'd also like to have asked Ms. Collins why,when recounting the success of her version of "Send In The Clowns" she left out any mention of radio airplay, the main engine of promotion that made that song a massive hit.

I look forward to hearing from you again, Mrs. Moore.

Walter said...

It hard to take you seriously when you repeat the lie that Sound Exchange is a RIAA cabal. There are more indie and artist reps on the board than the majors. Artists deserve compensation whether or not you like the majors. That is the only issue. Plus, almost every webcasting issue has been settled. What's your beef? I can understand you don't like the majors but why don't you want to pay the artists who get 50% of these monies. You always conveniently seem to leave that out. Its better to blame the RIAA when you simply don't want to pay the artists who are getting half of this money.

Marc Cohen said...

I don't blame the NAB for fighting to keep this exemption. It is a gift. Their argument that radio sells records is a double edged sword. Many other media help to sell records also, should they be exempt? Radio earns about $17 billion in ad revenues from playing music. Recorded music sales are about $12 billion. Who is getting the better deal?

Check out the Ad-Supported Music Central blog:

Ted said...

Hi Walter-

Thanks for stopping by and taking the time to comment. I feel honored to have a SoundExchange board member participate here (seriously).

First of all, you are flatly incorrect when you suggest that I "simply don't want to pay the artists who are getting half of this money." That has been an oft-repeated SoundExchange/RIAA lie and it is sad that you choose to propagate it. I am all for a fair copyright royalty rate, and applaud you for your personal role in making sure that artist now get to share in that money.

The rate hike sought by your organization -- SoundExchange -- for internet radio is not even remotely fair. It is obscene, and if enforced would force independent webcasters to shut down. That, as you might imagine, I have a problem with! And you should, too -- independent internet radio is an outlet that consistently plays interesting, not-quite-mainstream bands including ones that you represent like Dresden Dolls and Mission of Burma.

As for "almost every webcasting issue has been settled," please forgive me for keeping the champagne on ice. I will believe that when I see it.

Finally, to my omission...the hearing the other day was heavily stacked against radio. It was like watching Hannity & Colmes, and on this particular episode Hannity had his whole extended family with him. Every speaker except the lone radio representative presented this as a battle between big radio and artists. There was almost no mention of the labels (who get that other 50%). Was that glaring, misleading omission OK with you? I felt it needed a little balancing out.

Ted said...

Hi Marc-

Thanks for your comment and for helping to further this discussion.

You are right, the exemption is a gift, and it is a gift that has been giving to both sides for decades.

Are the major labels selling less music today? Apparently. Is that the fault of radio? I don't think so. I think that price-fixing CDs for decades has more to do with it. Even though they got busted for gouging, the list price of the new White Stripes CD? $18.98!

There is much competition for today's entertainment dollar, and price gouging is not the way to increase sales in such an environment. As an example, for the price of a couple of CDs one can buy an entire season of LOST episodes on DVD (with extras!), or a videogame complete with soundtrack, and so on.

I can't speak to who is getting the better deal, but the fact that today airplay sells records should not be open for debate. Bands and labels send free music to radio. They also pay companies to pressure radio to play that music. The reason for this is that today, airplay is excellent promotion.

In the discussion of whether artists should be paid for airplay and if so how much will, this salient point has been ignored, devalued, and sometimes outright denied. A reasonable outcome will not be achieved if the debate remains as one-sided as it was during Tuesday's House Hearing on Ensuring Artists Fair Compensation.

Rusty Hodge said...

From the SoundExchange website, here's the board of directors with my categorization applied:

Independent Artist Reps: 3
RIAA-releated Reps: 8
Other reps, often siding with the RIAA: 4
Other reps, often opposing the RIAA: 3

Seems like the votes will fall to the RIAA side in most cases. If I'm wrong, I'd like to know about it.

Truly Independent:

Richard Bengloff - American Association of Independent Music
Walter F. McDonough, Esq. - Future of Music Coalition (FMC)
Dick Huey - Matador Records (independent)

RIAA Representstives

Alasdair McMullan - EMI Music North America
Andrea Finkelstein - Sony BMG Music Entertainment
Kendall Minter (Entertainment lawyer, RIAA-affiliated label owner)
Larry Kenswil - RIAA
Michael Ostroff - Universal Music Group
Mitch Bainwol - RIAA
Paul Robinson - Warner Music Group
Tom Silverman - Tommy Boy Entertainment LLC (RIAA board member, although Tommy Boy isn't a RIAA member label)

Board members often siding with the RIAA

Daryl P. Friedman - Recording Academy
Jay L. Cooper, Esq. - Recording Artists' Coalition (RAC)
Kim Roberts Hedgpeth - AFTRA
Patricia Polach - AFM

Unknown or inconsistent RIAA siding:

Michael Hausman - Michael Hausman Artist Management, Inc. (Manages currently-independent released Aimee Mann, RIAA-released Suzanne Vega among others)
Patrick Rains - PRA Management (Manages RIAA-released artist Cheryl Crow and a lot of big smooth jazz names, operates an indie label PRA records that released 20 discs or so in the 90s)
Perry Resnick - Music Manager's Forum-U.S. said...

You are right, the exemption is a gift, and it is a gift that has been giving to both sides for decades.