Posts Tagged ‘ASCAP’

The Performance Rights Act: NAB CEO Gordon Smith Speaks Out

April 27, 2010

As usual every few days, it is now time to cast a jaundiced eye on that misguided piece of legislation called The Performance Rights Act. [If you missed it, the PRA is an attempt to add a royalty for performers to the royalties already paid to ASCAP and others by broadcast radio. Search the blog and you’ll find numerous postings on the subject.]

Today, National Association of Broadcasters (NAB) CEO Gordon Brown takes the battle to The Washington Post where he enumerates the flaws in this legislation, many of which I’m happy to see coincide with my own.

He starts off with one of my particular gripes — the fact that half of this money, touted as going to the artists, actually goes straight into the pockets of the record labels. For those of you paying attention to economic pattern displayed here, that means that most of it is leaving the country immediately. That’s not what sets my teeth on edge, though.

What about the rest of the money? That goes to the artists, right? Not necessarily:

With 50 percent in the labels’ pocket, the remaining money would be divvied up by SoundExchange, an organization launched by the RIAA to collect and dispense royalty payments to artists. The disbursement would be split 45 percent for the featured artist and 5 percent for the background musicians — if SoundExchange can locate them. But given media reports that SoundExchange had trouble finding the Mormon Tabernacle Choir, the location loophole seems to be a rather big “if.”

And there we have my biggest issue with all of this, paying the artists is the job of the record labels — one they do not have a history of being good at.

The record label claim that this legislation is about “fairness to artists” is dubious. D.C. native Herb Feemster of Peaches & Herb” fame — as well as artists ranging from Benny Goodman to Pink Floyd to Cher — had to file lawsuits against their record labels to recoup unpaid royalties.

Contrast the record label exploitation of artists with that of radio stations that advance the careers of musicians with free airplay and concert promotions. With a growing audience of 239 million weekly listeners, free and local radio remains an unparalleled promotional platform for music, generating untold billions in album and concert sales and merchandising opportunities.

You see, I’m in my mid-forties. I remember in my high school and collegiate years it seems like there was always a battle between some artist who had not gotten paid and his label. The Jimi Hendrix estate went through all kinds of absurdity over issues like that. Never once, then or when I was producing shows, did I hear anyone complaining about radio unless it was because they were not on it.

I’ve been an activist on behalf of artists for a long time now, as most people in New Orleans can attest, and as such, it pains me to see the RIAA preaching concern for their artists as a smokescreen for efforts to shore up their failing business model. Just because they are on the ropes in the post-Napster / iTunes age does not mean that our industry should be jeopardized to pay their bills.

Image: abstractstvCC BY-ND 2.0
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Nashville and the Performance Rights Act

February 22, 2010

Hello, all. Sorry to be back online a day or two late. I got stuck with a pretty severe case of the flu which has kept me from being able to write. Now that I am back, I’d like to steer your attention to the great state of Tennessee, home of that country music powerhouse Nashville!

Being an epicenter of the music industry, Nashville has a lot on the line in the current battle over the Performance Rights Act (PRA). Whit Adamson, President of the Tennessee Association of Broadcasters, feels strongly enough about the subject that he addressed the issue and the public directly in the pages of The Tennessean:

For over 80 years, radio broadcasters have had a mutually beneficial relationship: free radio airplay of music by over-the-air broadcasters, which in turn promotes record labels and artists and generates millions of dollars in music, hospitality, small-business and merchandise sales. Yes, the Grammy Awards and other single night ceremonies like the Country Music Awards are terrific showcases for Nashville’s music. But let’s not forget that all over America, local radio stations do this every single day!

Free, local radio reaches 236 million listeners every week — which vastly dwarfs the promotional value of artist airplay on all of the other music platforms like satellite radio, Internet radio and other subscription-based radio that pay this fee.

And it is usually at about this point in the discussion that those supporting the PRA point out what they consider the glaring inequity of broadcast not having to pay. An argument, like many of those on the other side of the fence, that means little due to its skewed presentation. Radio does indeed pay, just not this additional burdensome fee being proposed by the labels. Adamson continues:

It’s important to note that our radio stations currently pay hundreds of millions of dollars annually to groups like BMI, ASCAP and SESAC, which goes to compensate songwriters and Nashville music publishers. We recognize that songwriters have less opportunity to monetize their work than do the performing artists.

There lies an important and often ignored distinction. Radio has always supported songwriters and publishers, the people who create the music (sometimes the same people as those performing it, but far from always).  Performers have concert receipts to generate income, as well as other avenues such as merchandising. The songwriters, not always as much. While the singer/songwriter is an American icon, a quick check of the liner notes on most CDs will show that it is not by any stretch the majority.

Adamson loses with the following abjuration, one with which I agree:

For the sake of our region and the future of music, we should not risk the viability of free and local radio stations that have been such a huge economic engine for Nashville over the decades.

Image: jimbenttree / CC BY 2.0

Another Royalty Issue Looms

October 16, 2009

ascapIn my research for these blog posts, I surf through a wide variety of websites ranging from industry publications to personal blogs and anything in between. Today, I came across an interesting post on the Broadcast Law blog concerning a royalty issue that I’m sure many of you are unaware of.

I’ve been writing a lot about the Performance Rights Act as it makes its way through Congress. It proposes that a new royalty be imposed on broadcasters, one that goes to the recording artists who perform the tune played. That is not the royalty story I am writing about today.

You see, that battle has been raging across the media and the blogosphere for many months now and has everyone’s attention. There is, however, another royalty story that has gone unnoticed until now: a potential increase in ASCAP and BMI royalties, the ones every station already pays to the songwriters.

David Oxenford, who you might have seen moderating a panel at the recent National Association of Broadcasters (NAB) Show, examines the issue in his recent blog post. The ASCAP and BMI royalties he is speaking of are the product of agreements made five years ago when the economy was in less of a disarray. The fees in question were fixed rate, but due to projected growth in broadcasting were also set to increase each year:

But, as radio revenue has not continued to climb, but has in fact fallen in recent years, the fixed industry fee has caused the ASCAP and BMI fees to constitute far higher percentages of radio revenue than ever before.  At the same time, ASCAP and BMI and the composers that they represent have become accustomed to receiving an established, growing pot of money each year.  With two sets of differing expectations, conflict could arise.

This is something we all need to be aware of and involved in. With the explosion of options for music on Internet and mobile platforms, this subject could become murky very rapidly. Mr. Oxenford continues along that line later in his post:

These issues can become difficult, too, as it is not always clear where ASCAP and BMI’s rights end and where a broadcaster must deal directly with music publishers.  For instance, there is a question of whether a podcast is a public performance of a song or the making of a reproduction of that song – a different copyright licensed by the publishers, not the PROs (a topic we’ll discuss in another post).  This may present another difficulty in the royalty negotiations.

New technology will be the crux of this issue in my opinion. The delivery mechanisms it offers are widely varied and are completely new facets of the royalty debates. We have already seen the long and curious process of negotiating this sort of thing when Internet royalties were being decided in the recent past. Now the specter looms once more and the possibility of litigation in the case an agreement cannot be reached is one that should be watched closely.

As the economy continues to be in flux, the fixed rate royalties not only become more onerous to broadcasters but also present a regular income stream to the PROs. Stations across the country have already seen their profits devoured by the increasingly large percentage of the bottom line that these fixed rates represent.

The Broadcast Law Blog that I drew my quotes above from seems like a great resource for those who wish to keep up to date on issues of this nature. I’m sure that I will be stopping by frequently in my future research. For those similarly inclined I advise it!

Image: ASCAP logo / Fair Use: Reporting