Will MusicFirst's effort to rationalize performance royalties really put artists first?

by Gigi Sohn, Public Knowledge

The recording industry was kind enough to invite me to join a conference call announcing a new coalition called musicFIRST, whose members include the RIAA, Soundexchange, the music industry unions and over 80 artists. The coalition’s sole goal is to eliminate the exemption that over-the-air broadcasters have from paying the same performance royalties that satellite radio and webcasters pay to the record labels and performers. Representatives from RIAA and Soundexchange were on the call, as was Martha Reeves from the Motown group Martha Reeves and the Vandellas (who is now a member of the Detroit City Council) and Rob Garza from the band Thievery Corporation. The coalition’s clear message is that as a matter of fairness to artists, the exemption should be repealed.

I was invited on the call presumably because I have said previously that exempting over-the-air broadcasting from paying these fees when the other technologies pay them is illogical to the extent that the rationale for this exemption is the promotional value broadcasters provide to record companies and artists. Indeed, for all except perhaps the most popular songs, webcasters and satellite radio may provide more promotional value, since the vast majority broadcast radio playlists are limited to a few hundred songs.

But despite my support for regulatory parity and fairness to artists, I left the call feeling that a lot of questions surrounding this issue still need to be answered (I tried to ask some, but my requests were ignored — no surprise there). First and foremost among them are: how and how much will actual artists be paid if the coalition is successful? Martha Reeves told the tale of Eddie Kendricks of the Temptations, who died destitute. Was it because of the lack of broadcaster performance royalties, or the fact that under most recording industry contracts, artists hardly reap a dime from their recordings? We want to see artists get paid – and if all repeal of the broadcasters’ exemption does is further enrich record companies at the expense of artists, then we won’t have a lot of passion for it.

The second question I would have asked would have been this: shouldn’t legislation to repeal the public performance exemption for broadcasters also include provisions to ensure that small webcasters like Live365 are not put out of business by the recent Copyright Royalty Board decision to increase greatly webcasting fees? Rob Garza can probably count on two hands the number of times Thievery Corporation’s music is played annually on a broadcast radio outlet. Yet because of the CRB’s steadfast refusal to grant any relief to small webcasters, the entities that likely do play his music will likely not exist in a month, taking along with it the band’s royalties and recognition. Although I think that small webcasters should get this relief regardless of what happens to the performance royalty exemption, it makes even more sense that if broadcasters start putting their significant resources into the performance royalty pot, it should be balanced by giving small webcasters relief.

Finally, if the broadcaster exemption is repealed, will the recording industry and some of the other groups represented here give up their efforts to impose technology mandates like the broadcast flag on new radio receivers like the Inno? Nobody would disagree that broadcaster performance fees would dwarf whatever benefits the recording industry might gain from a tech mandate. But a written promise to forgo such mandates would be a good start (but remember the promise RIAA made to the same effect in 2003), as would recording industry support for some of our more modest copyright reforms. Until PK and some of its allies can be assured that repeal of the exemption will really result in fairer treatment for both artists and their fans, we are unlikely to get in the middle of what is sure to be a battle royale between the recording industry and broadcasters.

article originally published at http://www.publicknowledge.org/node/1014.

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